News

Sears changes strategies with hopes of overcoming low sales

November 14, 2011

Edward Lampert, chairman of Sears Holdings Corp., is changing everything about the department store that Americans have shopped since the 1890s.

He is lessening the company's dependence on full-size locations, where sales have fallen, and is focusing on smaller store formats, Web sales and the lure of its brands to re-ignite growth, according to Bloomberg.

Sears has closed 171 of its larger U.S. stores since the company merged the chain with Kmart in 2005. It's accelerating franchising efforts -- including the Sears Hometown and Sears Auto stores. It's also leasing space to other retailers, including Forever 21, and is also now allowing others to sell the popular brands previously only found in Sears, including DieHard, Craftsman and Kenmore.

The brands "still have equity, they still resonate" with consumers, Robert Passikoff, president of Brand Keys, a New York brand-equity consulting firm, told Bloomberg. He thinks that Sears should go even further, suggesting that it "close down the stores and just license the heck out of the brands."

During the 2005 Kmart merger, Lampert said the new concept would have the geographic reach and scale to compete with Wal-Mart, but that's not happened.

From the story:

Lampert, who along with his hedge fund owns about 60 percent of Sears, has since presided over 18 consecutive quarters of declining sales. The chain is on its fourth chief executive officer. While the shares soared in the first few months, the company's market value has since tumbled to about $7.7 billion, a 37 percent drop from the $12.3 billion acquisition price. The shares fell 2.8 percent to $72.25 at 4 p.m. in New York.