Can Sears' new hire save the company?
In a move that hints at a renewed focus on merchandising, the company picks a Brookstone exec.
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:
| Tags: | Jonathan BerrMSHLDTGTWMT |
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.
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.
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.
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.
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.
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