Sears pulls plug on CSC

Sears has terminated its $1.6bn (£875m) IT services contract with CSC.

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.

Read more on IT risk management