Article from the Chicago Sun Times recapping the first year of the Sears/K-Mart merger in an article called “Furniture, new luxury items in Sears’ plans“.
Interesting points:
A few certainties emerged at the first shareholders’ meeting of the newly combined Sears Holdings Corp.: Lampert sees great opportunity in home fashions without Martha Stewart, even though Kmart’s existing contract with Stewart gives the parent company the right to sell her goods in Sears Roebuck stores.
Stewart’s contract exacts too high a price in guaranteed minimum royalty fees from Kmart, and the two sides have been unable to work out a long-term agreement, Lampert said. Kmart’s contract with Stewart ends in four years.
It doesn’t make sense to sell Martha Stewart goods in Sears stores for just a few years, Lampert said. Another sign of the fraying relationship came last week when Stewart agreed to provide higher-end home goods exclusively to Macy’s department stores.
Instead, Sears will try again to sell furniture — this time, ready-to-assemble furniture; will expand to 100 stores its test of high-profile Lands’ End “shops,” featuring dedicated salespeople and online ordering and hotline telephone access to Lands’ End; and introduce a new, private label line of luxury bed and bath products called Everyday Luxe.
Martha Stewart no longer in K-Mart? Speaking for current and former K-Mart execs, I don’t think that they would have ever thought that they would see the day. I’ve heard stories about the extravagant measures that K-Mart has gone through to keep all eyes focused on that brand. It was their cash cow, as one former exec told me. The people I know that still shop at K-Mart seem to only shop there because of the Martha Stewart line. If K-Mart loses this, I don’t know how they’d recover. They need something big — huge — and furniture is not going to cut it.
However, Martha branching out to Macy’s is a win-win situation for both sides. Martha is diverisifying her retail presence at a time when her brand is red hot and Macy’s gets a red hot brand to add to their home line. Great move by Martha, smart move by Macy’s, and whoever is making the moves at Sears/K-Mart should be fired.
Store managers are asked to act as cheerleaders by passing the rules on to their subordinates, and to pledge their allegiance to the new culture. If they don’t, they must leave. The result: 35 percent of Sears’ 870 store managers have departed since the merger, and 25 percent of Kmart’s 1,400 have left.
What an incredible rate of turnover. Who are they filling these positions with? New hires? I don’t know how many people from other retailers are really ready to make the jump to Sears at this time – I don’t know of any. Internal promotions? With the amount of holes to be filled, have they really promoted the best people from inside? I have to imagine that there were some rushed promotions of people who may not be ready just yet. But of course this is speculation. I’d just relaly like to know how they have filled over 650 store executive positions. On top of that, what’s the rate of turnover at the ASM/Lead level? I’m sure that is just as high, if not higher.
From the grumbles that I read on employee message boards, it seems that most days there is no captain at the head of the ship and the employees are trying to do the best they can with little or no leadership.
Both Kmart and Sears are getting upgraded information technology systems in stores, and concentrating on the basics such as cleaning the bathrooms, stocking the shelves and sourcing merchandise that customers want, Lewis said.
Isn’t this what is taught in Retail 101? Amazing that a multi-billion dollar company can announce a turnaround plan revolving around “stocking the shelves with merchandise that customers want.”
My dad went to Sears the other day and had an unpleasant customer service experience. I won’t get into the long story now but at one point he told me that he showed his Sears card to the cashier, showing her that he’s been a Sears card holder since 1978. “Doesn’t that mean anything?” he asked me. I told my dad that this weekend he went to Sears – but his loyalty was the Sears, Roebuck & Co. “That company no longer exists.”
You can read the full article here.