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Sears general overview
In September, Sears posted its second consecutive
positive same-store sales increase, following two years
of declines. The retailer said same-store sales in its domestic
business was up 3.2 percent. But just this week, Sears Roebuck
& Co.'s (S) announced that domestic October same-store
sales declined 2.7%, worse than analysts' forecast of 1.6%
growth, as warm weather weakened demand for seasonal apparel.
In a recent press release , Sears said total domestic sales
for the four weeks ended Nov. 1 fell 2.2% to $1.9 billion
from $1.94 billion a year earlier.
According to Sears' prerecorded sales message, the company's
lawn, garden and fitness divisions posted the strongest
gains for October, with same-store sales up in the low thirties
percentage range. The company also continued to see sales
growth in its home appliance segments. Total apparel same
store sales fell in the low teens as Sears took a hit from
the unseasonable weather that hurt many clothing retailers
during the month. Sears expects its fiscal fourth-quarter
same-store sales to be flat to up in the low single digits,
according to its prerecorded sales message. For the fiscal
year-to-date period, Sears' same-store sales dropped 2.3%.
Total sales declined 1.7% to $19.3 billion from $19.63 billion
a year earlier.
A number of Sears locations have been revamped with new
layouts, more merchandise, more associates and easier check
out. Customers will see better signs and conveniently located
checkout areas as the company adapts to a new breed of customer
who wants more self-service and shorter lines, said Leslie
Teal, marketing manager at a Hampton store. "The store's
more inviting," "We've more choice, more variety
and quicker checkouts," Teal said. "Customers
know what they want. They want to come in, get what they
want and be on their way."
Toddler and infant department
strategy
We visited a recently renovated Sears store in the
suburbs of Los Angeles and found a new layout, visible registers,
shopping carts and tons of signeage. Each major brand within
each department was clearly indicated with wall signeage
with signs at the top of all four ways. The overall effect
was very much a series of boutiques within a boutique with
the Land's End brand off in its own area to the side of
each department. We also noted that Sears has gone so far
as to price almost every item on the floor on sale at 30-40%
discount. Only Land's End merchandise was more or less at
full price. Could Sears be chasing Kohl's strategy of heavy
branding, constant discounting, shopping carriages and centralized
check outs? Absolutely!
In terms of the look of each brand, Land's End is a selection
of core basics with high quality workmanship, Covington's
is value with fashion added and Canyon River Blues continues
represents their denim and related separates merchandise.
Over all the fashions were very conservative, clean and
well displayed. In the infants and toddlers area we found
many long standing brands including Carter's, Little Wonders
and Healthtex but the majority of the merchandise was from
house brands.
Opportunities in the girl's area
We are closely following the dramatic turn around
at Sears and see a difference in their product line up already.
While some of the merchandise is very safe, in the infant
and toddler area, things are definitely cute and sweet.
In terms of definitive opportunities here, there could still
be some fun, value based and seasonal items on the floor.
In the knit top area this might translate to a series of
long sleeved holiday tee shirts with novelty screen ideas
or pom pom trims. In the knit pant area this might mean
a two for one deal where the hanger has both a solid and
a patterned pant at around $12 in infants and $14 in toddlers.
The sets here were out of this world so the opportunity
here is to offer up more of this great merchandising!
A look into the department:
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