Posts Tagged 'Sears Holdings'

Sears Canada: One more ominous sign

Sears Holdings is always good fodder for RetailWire panel discussions, and the announcement that SHLD is selling its share of Sears Canada (to its own shareholders?) is no exception. Here’s my point of view:

Where to start? How about at the endpoint of the commentary, where Sears can only be saved by a “master merchant”? If the last ten years have taught observers of Sears anything, it’s that Mr. Lampert will not cede authority to anybody else, as long as he feels he is a “master merchant” himself. And with a number of other companies looking for new leadership (starting with JCP), why would any “master merchant” take on the challenge of a company whose real CEO refuses to invest in the business?

I haven’t shopped Sears Canada for several years, but at one time it was a credible quality alternative to The Bay. (I believe this is no longer true.) The idea of selling the company to its existing shareholders is akin to the recent “loan” from ESL hedge funds to Sears Holdings. It’s a Band-aid where a tourniquet is probably required.

Finally, it’s worth noting in the¬†Wall Street Journal coverage that one company insuring vendors against Sears’ non-payment is canceling its coverage as of October 6th. How many smaller vendors will cut off shipments for 4th quarter, and will the downward spiral accelerate?

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Lands’ End: Out from under Sears’ shadow?

Lands’ End first earnings report as a separate company (following its spinoff from Sears Holdings) was good news for longtime fans of this retailer. Here’s my take from a recent RetailWire discussion:

One quarter does not equal a long-term trend, but the early signs for Lands’ End are encouraging. If the company emerges from the shadow of Sears Holdings and continues to focus on the fundamentals (merchandising, promotions, inventory management) it should continue to grow. Lands’ End luckily survived its years of ownership by Sears with most of its brand equity and reputation intact.

As a growth opportunity, Lands’ End is different from most retailers who have too much square footage and not enough web presence. This may be one case where a bigger brick-and-mortar footprint (limited mostly to its Inlet stores today) can help the overall brand strategy. Certainly Eddie Bauer is the competitor most likely to lose market share at the expense of a thriving Lands’ End.

Good news for Lands’ End…finally

Sears announced earlier this month that they plan to divest their Lands’ End and tire & auto divisions. While the outlook for Sears Holdings continues to dim, this is good news for Lands’ End. Here’s a brief comment from a recent RetailWire discussion:

If Lands’ End wants to grow its brick-and-mortar footprint, and has the resources to do so, getting out of the Sears stores (and their lengthening shadow) is the best thing that could happen. The brand has managed to maintain its own brand integrity even in the middle of the slow-motion Sears train wreck.

On the Sears Holdings “management team”

RetailWire started a provocative discussion among its BrainTrust panelists by headlining its article: “Should Eddie Lampert Fire His CEO?” (Referring to himself, of course.) I’ve had plenty to say about Sears Holdings over the years, and my latest comment follows:

It doesn’t matter whether Eddie Lampert carries the CEO title or not…as the question suggests, he is calling the shots. The answer is “no,” if the conventional definition of a turnaround is actual improvement in operating results, merchandising and the store experience. But none of these has been on Mr. Lampert’s agenda for a long time, while he is more preoccupied with ways to leverage the company’s assets and come up with farfetched ideas like data storage and disaster recovery. So don’t expect this picture to improve anytime soon — the only question is what’s the endgame.

Bluelight special on data storage?

Sears Holdings has come up with one idea after another about ways to generate revenue from their assets, very few of which have anything to do with improving their retail model. The latest has to do with using Kmart and Sears locations for data storage and as disaster recovery centers. Needless to say, my comments on RetailWire (like most of the other panelists) were not very positive:

Kmart disaster recovery? Sears data storage? Really??

This is the latest example of Sears Holdings management floating a “big idea” to gain traction from its real estate portfolio. Most of these ideas have not turned into reality, but they serve to distract SHLD from the necessary task of investing in its actual brick-and-mortar stores. The quarterly losses and sales declines won’t stop anytime soon with this scattershot approach.

Is “bad news” contagious for retailers?

The question in my headline came up during a recent RetailWire discussion about the well-publicized troubles at JCPenney and Best Buy during the past year. (And since this comment was published, the news has only gotten worse for JCP.) I believe that this has a chance to become self-fulfilling prophecy:

Some of the commentary falls into the “schadenfreude” category: Enjoying another’s misfortune. Certainly every bit of bad news coming from JCP and BBY recently (from the results to internal management turmoil) fits this description. JCP in particular hasn’t done itself any favors over the past year by relentlessly beating the drum in public for the genius of its reinvention strategy, and then proceeding to fall on its face.

But the “bad news” syndrome can also range from companies like Sears Holdings (which stopped being relevant a long time ago) to consistently great performers like Apple who are now under a microscope for any perceived misstep. Apple doesn’t need to worry about its overall business model, but it does need to launch some innovative products that will refresh its image.

MetaScale: Sears tries marketing its assets again

I’ve lost track of the number of discussions over the years about various strategies used by Sears Holdings to “leverage its assets” rather than fixing what’s broken. MetaScale is a data management service (pitched to other retailers) that represents the latest opportunity to avoid spending capital in stores or updating the merchandise content. Here’s my comment from RetailWire:

There is a long list of specialists in providing data services and information management especially to retailers — such as IBM, SAP, SAS and others. This looks like yet another attempt by Sears Holdings to avoid dealing with its core problem: The lack of capital spending and compelling merchandise in its stores.

If the methodology behind MetaScale were so effective, wouldn’t we all be talking about Sears’ great results in supply chain and inventory management? Sears Holdings ended 2011 with 5% less inventory but also had a gross margin decrease from 27.2% to 25.5% — not exactly worthy of bragging rights.


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