Sears has terminated its $1.6bn (£875m) IT services
contract with CSC.
The giant US retailer originally signed the 10-year deal in June
2004. Under the deal, CSC provided support for Sears’ desktops,
servers, data networks, data analysis systems and web-related
systems.
Sears said it was cancelling the contract because of CSC's
“failure to perform certain obligations”. Exactly what these
obligations were remains unclear, with neither party revealing the
details.
Sears said it did not expect to incur any “material termination
penalties” as a result of ending the agreement “for cause”.
However, CSC disputes that grounds for termination for cause
existed. The IT services company had unsuccessfully sought an
injunction prohibiting Sears from terminating the agreement for
cause.
CSC claims that Sears is liable for compensatory and punitive
damages.
Sears said it had properly terminated the agreement for cause
and intended to contest CSC's claims “vigorously”.
When it signed the deal, Sears expected CSC to improve the
operation of its IT infrastructure by making it more stable,
keeping it better updated and running it more efficiently and
economically.
Sears believed the agreement would let its IT department focus
on IT work specifically related to its retail business.