Hedge Funds and Hemstitches
Jennifer Marks -- Home Textiles Today, September 12, 2005
He has developed a reputation in financial circles as one of the nation's savviest money managers. But who knew that Eddie Lampert possesses design flair as well?
Sears Holdings, of which Lampert is chairman and a 39 percent owner, announced last week that its top executive will henceforth direct marketing, merchandising, design and on-line business. The portfolio of properties he will oversee includes Sears, Sears Essentials (50 stores by January), Kmart, Lands' End, specialty retail stores, and a 50 percent stake in Sears Canada.
Not that anyone expects him to start trolling the market or running the aisles at Heimtextil. The purpose of the shift, according to the company, is to enhance customer focus.
Lampert will have a lot on his plate — particularly the conversion of roughly 400 Kmart units to the Sears Essentials format, a strategy that is expected to be completed in the next two to three years.
Sears Holdings is still integrating the headquarters functions of Kmart and the former Sears, Roebuck & Co., having eliminated about 1,400 positions from the individual home offices in late July. The international buying offices are also being integrated, although numbers on the shakeout of that process haven't been announced.
On the merchandising front, Sears Holdings has gotten under way with the cross-platforming of captive and private label brands. Sears' Kenmore and other home appliances and lawn & garden products have been added to four Kmart stores, its Craftsman tools to nine. More migration is expected in the as-yet-undisclosed number of Kmarts that will not be shuttered or converted to Sears Essentials. The company expects to place appliances in 50 Kmarts by year-end.
Then there's the big merchandising kahuna: “putting brands exclusive to Kmart into Sears locations.” Hello, Martha.
The truly critical priority is to find some breathing space between Wal-Mart's low prices, Target's cheap chic, JCPenney's improving soft lines mix and Kohl's evolving stable of captive brands.
Possibly the addition of appliances and tools to Kmart is intended to position it a “convenience” alternative to the behemoth boxes operated by Home Depot and Lowe's. Perhaps Sears Essentials is envisioned as a broad-line rival to Kohl's, et al.
When Sears Holdings completed its merger transaction last March, Lampert announced there would be no analyst calls, no Wall Street road shows. The company, he said, would play its cards close to the vest — and it continues to do so. But, hey, it's his money.
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