Can Sears' new hire save the company?

In a move that hints at a renewed focus on merchandising, the company picks a Brookstone exec.

By Jonathan Berr Jan 3, 2012 3:51PM
Sears Holdings (SHLD) chairman Edward Lampert has finally figured out that the way to turn around the ailing chain is to hire people who know the retail business. It's a long-overdue step in the right direction.

The company said Tueday it has hired away the CEO of Brookstone, Ron Boire, as its chief merchandising officer. Boire will report to CEO Lou D'Ambrosio, whom Lampert hired last year despite a lack of retail experience. Brookstone, long a fixture in America's malls, is holding its own financially -- which is more than can be said for Sears, where sales have declined for 18 straight quarters.

According to Brookstone, sales in fiscal 2011 were up about 5% from 2010 while EBIDTA soared at least 20%, thanks to initiatives undertaken by Boire such as an online marketplace and the expansion of its wholesale and licensing divisions.

"Brookstone has been fortunate to have Ron’s leadership over the last two years," said board member Adam Suttin, a partner at J.W. Childs Associates, one of the investors that acquired Brookstone in 2005, in a press release. "He successfully implemented numerous new business initiatives that will have a lasting impact on the company’s continued growth and success."

Sears investors were not as enthused. The company's shares, which fell nearly 60% over the past year, were down more than 1% Tuesday afternoon to $31.36. Shareholders want more proof that the turnaround that Lampert has promised for years is finally taking root. Their skepticism is understandable.

After a terrible holiday season, Sears announced it would close as many as 120 poorly performing stores (see the store list here). One of Sears' biggest problems is a lack of a clear brand message. Sears needs to give people a reason to come to its stores. 

Wal-Mart
(WMT) is the store where shoppers go in search of low prices. Target  (TGT) has a hipper brand and attracts slightly wealthier consumers. Who is the Sears shopper? I don't know because, like most consumers, I don't remember the last time I set foot in a Sears.   Attracting consumers like me will be Boire's biggest challenge.

Higher-end chains such as Macy's (M) are bringing in shoppers with exclusive merchandise.  Sears' answer in this trend was to partner with the Kardashian family of reality TV queens.   The Kardashian Kollection, though, seems out of place in a store that also sells Craftsman tools. Sears is trying to be all things to all people. By the way, there is a 30% off sale on Kardashian merchandise.

In a press release
, Boire tried to put a positive spin on the challenges that lie ahead.

"I understand the company's challenges, but I am more persuaded by the company's opportunities and strengths," he said.

Sears shareholders, though, are well-aware that talk is cheap and that actions speak louder than words.
 
--Jonathan Berr owns shares of Target.

Related reading:



 
20Comments
avatar

Sears needs to sell American made and market itself as the Great American Company reborn.. (When I think about Sear I think about America . Once a great place to work and Live ..) Now is you want to live in America you need to work in China..

Lets help Sear and America out . Everyone should go to sears weekly and buy something that was made in America .  Lets forget about the $5 chinese items . Support your back yard.

Jan 3, 2012 10:32PM
avatar
I won't step into a Sears Store as long as the Kardashian's are selling their merchandise in that store!!!!


Jan 4, 2012 8:32AM
avatar
We have been  shopping at Sears for many years. As a union and military family, we would love to buy American. We check all labels and buy American whenever possible. Was very upset when Sears and Kmart joined forces. Not overly thrilled with Kmart. Poor quality and rude and obnoxious young employees. Hire more mature employees and  move towards selling all AMERICAN MADE  products. Buy American and save jobs here. NO MORE CHINA...
Jan 3, 2012 8:29PM
avatar
Sears biggest problem is that they have a declining and aging shopping base of customers.  There primary customer is the 50 plus crowd.  It's not that SEARS carry's horrible brands it just that they are not considered "the place to shop".  It's no secret that SEARS is losing revenue and profit and will continue to do so regardless of who they bring in to run their merchandising staff.  I wouldn't be surprised to see them sell off the Kenmore appliance and Craftsman tool brand and close down the stores.  Another option as stated on another site which may have some merit is to remerchandise all the stores to only stock products predominately made in America.  Contrary to what people think there are still clothing companies, tool companies etc. that make product in America and it will give SEARS a distinct position against their competitors who continue to rely on imports. 
Jan 3, 2012 10:39PM
avatar
Comparing Sears to Wal-Mart or Target is like comparing apples to oranges. First off, they're not in a position to be ran like them. People who go to Sears are usually in a mall. They are not going grocery shopping. Their competitors are JCPenney, Dillard's, Macy's, etc. For Sears to go after Wal-Mart or Target, a total makeover would be necessary and it's possible through investment and a better business model. Close down the 120 under performing stores but open new stores away from a mall. Open the aisles, brighter colors and fresh brands with quality products. Hire a marketing firm to get the new look out there. Existing K-Marts could be remodeled to fit the new business model. Try a handful of them, hire better managers and rule with an iron fist. With this much on the line, I'd want to know what is going on in every store and my moles would inform me.
Jan 3, 2012 11:48PM
avatar
Actually, Sears has a better selection of in store TVs than Best Buy, at the same or better prices. They have a better selection of name brand washers, dryers, refrigerators... as well. They have good product selection and a very good online catalog with good sales, but they don't market their products well. I always buy craftsman tools and power equipment. 
Jan 4, 2012 11:17AM
avatar
Sears can make a stand by moving all their product lines to those only made and manufactured in the US, not just assembled in the US, made and manufactured in the US.  It will take a couple years to implement but they could promote their move and make major announcements when they sign up with companies that employ  American workers.  They can negotiate with with companies to create new product lines to replace imported ones.  Back the products up with the Craftsman name.  Call your products, "USA Craftsman" ship products.  This will set Sear Holdings apart from other companies.
Jan 3, 2012 5:38PM
avatar
Sears has dinosauritis. They will become extinct unless they change. They keep doing the same things expecting different results. The ability to improve & become an industry leader is within their own grasp, yet they overlook the obvious. This opportunity exists within their own structure. Nothing new has to be added; just by doing the same thing differently an additional $40/billion in revenue can be earned within 3/years. But, can they be saved from their own ocular deficiency? 
Jan 4, 2012 11:38AM
avatar

Along with an ageing business plan Sears has gone the route of plastic, no quality control chinese crap. Craftsman tools are a joke. There is no quality what so ever. I am a man who uses tools every day. I used to have a very high opinion of craftsman tools but not any more. Of the craftsman tools I've bought in the last three years I have more non-working tools than working ones. Do they stand behind them like they use to? No! I have a table saw that is an older one and needs a new motor, can I get one? NO! They say (some non-english speaking person in India) the model number is not a good one so they can't help me yet it is clearly the number as it states on the placard, " when ordering parts from sears use this model number" and it is clearly legible. I have a crapsman router that burns up with about every third use then needs new brushes, it is less than a year old and almost 100% cheap plastic inside, the outside gives the appearance of metal but when removed it is nothing more than a cheap veneer of cheap aluminum skin over cheap plastic. Their tools are crap and cost as much or more as real tools for the professional made by reputable companies like Rigid and others.

If they want to save this company it will take nothing more than getting out of china, divorce itself from k-mart  and start building tools and products in America with strict quality control standards and STAND BEHIND what they sell with a marketing plan that apologizes to Americans for their mis-guided business practices like customer service reps in india and re-ignite the American standard and quality, if that can even be found in America anymore where greed overides ethics in business and customers service is dead.

Sears used to be a house hold name, now it is a chinese/kardashian joke that needs to die.

Jan 4, 2012 10:40AM
avatar
Yes Sears can be saved if they remove the k mart sign Sears always hade good products when I was a young kid Sears was the only store
avatar

Sears reminds me of Herman Cain: $9.99 

They are experts in adding a digit to a model number so they will not have to meet a competitors price.

Jan 4, 2012 11:14AM
avatar
I shop at Sears.  I am 31 years old.  I like them because they save reservists jobs for them.  active duty service people come back to the same job with the same pay.  Also, I got a great front-loading washer/dryer set for the price of a single machine elsewhere.
Jan 4, 2012 1:34PM
avatar

Someone

Ridgid is no longer a US company.  Ridgid tools are now made in China and can be classified as "toys"!

Jan 4, 2012 11:24AM
avatar
As someone stated before it has a lot to do with the tired face of Sears and K-mart. I worked for Sears when they had the catalog sales, and I was going to collage. I considered it a great company. But later, I discovered the electric tools weren't keeping the same quality as they once did. I repaced a saw 3 times and always had problems with each one. I finally went with Ridgid and haven't had any complaints since. Their other tools are top notch still. But when a person is deciding where to shop, you don't want to walk into the store that hasn't had a face lift since the 1980's. A person wants to have a little adventure and see what's new. If they need some help with a quality face lift design I'm available.
Jan 4, 2012 4:14PM
avatar

People are highly motivated by low prices as stated by Mai Lor.  Sears does have some great prices if you catch their sales.  However, they are not Wal-Mart in terms of prices.  But then again, neither does Target and they are siphoning off market share from Wal-Mart and doing quite well.   The reason from what I have heard and read is that many shoppers, myself included, would rather pay a little more than go to the ghetto sections where many Wal-Mart are located where you often feel you are in a third world country.  An attraction for some people is that Target's offerings are often a little more upscale.   It might be that Sears  should look to Target for answers on how to improve performance. 

 

I am really pulling for Sears but, they need to shed the old, stodgy image.   As said, you can get some great deals.  However, it now seems that people think of Sears as a place where their grandparents used to shop.   

Jan 4, 2012 2:08PM
avatar

In order to run a successful store you have to attract successful buyers with good products and make sure that the products are what your consumers are asking for. I have noticed over the course of years shopping at Sears stores they have loss the sailing and advertising tools to create a more inviting store when it comes down to shopping people want to feel appreciated in a store. One big issue that I have noticed about SEARS is not having the right quality of clothing and products that people want to buy. The stores are out dated and there are know real feel of sense of store quality when you walk in I feel like I'm at a drive through warehouse picking up hardwood. I think if you change the decor of the stores and enlighten the areas with a feel of comfort. And how about incorporating the star bucks and a bistro in the stores people like to shop and have refreshment when they are shopping I feel that most stores are lacking that intimacy with the consumers.

Jan 8, 2012 11:34AM
avatar
Oakland County Business Association Inc Michigan

Save Sears and Kmart!  We have the plan.
Oakland County Business Association Inc Michigan

We have developed a totally unique, creative, imaginative, visionary Advertising, Marketing, Merchandising program that will drive millions of customers back to Sears and Kmart stores.

At one time, one of every two houses in America had a Kenmore appliance.  Now it is less than one in three.

Customer service at Sears and Kmart is totally non existent.  On December 10, 2011, I went into Sears in Waterford Michigan.  Six associates walked by me.  Not one of the employees smiled, greeted me or asked if I needed help.  At the check out counter, several people waited and there was no one to ring them up.

To quote Tom Cruise in the 1988 Academy Award winning movie: Rainman.  "Kmart Sucks".  That is the generall consensus of American shoppers that vote with their dollars and when they shop.

Recently, Kmart began marketing kitchen products under the Chef Gordon Ramsay name.  Sears began exclusive marketing of Kardashian Kollection clothing and accessories.  These marketing programs are the best new promotions either company has begun in well over 20 years.  This past spring and summer, Sears advertised they beat Home Depot and Lowes for lawn equipment.  This was also a great marketing program.  However, sales and profits continue to slide at Kmart and Sears.

We have sent certified letters to Edward S Lampert, Chairman Of The Board, Sears Holdings Corporation and also to Lou D'Ambrosio, Chief Executive Officer.  In addition, we sent first class letters to many top executives of Sears Holdings Corporation.

Advanced Creative 2012 Advertising Marketing Merchandising programs will get customers into the stores and spending millions of dollars.

Remember Montgomery Wards, Hudson's, Marshall Fields, Korvettes and many other defunt department stores?

We can save Sears and Kmart!   Mr Lampert and Mr D'Ambrosio, call us, we want to help.

These Advertising, Marketing, Merchandising programs we have been working on will guarantee a significant increase in sales and profits, while reducing shrink.

All investors and stockholders of Sears Holdings Corporation, contact the company and tell them to implement our Advanced Creative Advertising, Marketing and Merchandising programs now.  By summer 2012 sales will increase substantially.  Investors and stockholders will lose their investment if Sears and Kmart close or file bankruptcy.

Save Sears and Kmart!   We can do it!

Michael Spector
Advanced Creative

Oakland County Business Association, Inc Michigan
Box 222  Walled Lake, MI  48390
(248) 396-0396
OaklandCountyBusinessAssociation@yahoo.com

Jan 4, 2012 3:24PM
avatar
I don't think New Hire will save the company.
It doesn't matter who they hire, the consumers are looking for low price, Not the CEO, Not the
Manager, Not the Cashier.
-People shop there, because there is a nice manger?  No.
-Because a young lady is the cashier?  No.
-Because the store just remodel?  No.
Jan 4, 2012 2:02PM
avatar
I have always bought lawnmowers from Sears. Over 25 years I have bought three. The last one is a piece of junk and I will not buy any more from Sears.
Jan 4, 2012 10:27AM
avatar

I am waiting right now for the sears repairman to fix my gas stove - for the second time in 9 months it needs a new igniter.  i don't want to spend another 125 dollars to extend the warranty so i'll watch him carefully so i can fix it myself next time.  how tough can it be to light a flame?

 

my sears vacuum also broke prematurely.

 

at least the chinese don't charge high prices for their junk.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
275
275 rated 2
482
482 rated 3
656
656 rated 4
643
643 rated 5
650
650 rated 6
638
638 rated 7
485
485 rated 8
281
281 rated 9
127
127 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
CTSHCOGNIZANT TECHNOLOGY SOLUTIONS10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
HPQHEWLETT PACKARD CO10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.