Great Indoors keys Sears transition
March 5, 2001,
NEW YORK-The year 2001 will be a "transitional year" for Sears, as it "moves from the old strategies to new ones," said chairman and ceo Alan Lacy, including the acceleration of its The Great Indoors format.
The updated store format, which debuted last year in Dallas, had a great year, he said, with more than 20 percent comp store sales. And this year it will transform from "a pilot test to rollout mode," he said, adding 11 stores in the second half of the year.
With four stores currently operating, the format will expand into major markets including Chicago, Cincinnati, Houston, Phoenix, Southern California and Columbus, OH, for a total of 15 stores by yearend.
The Great Indoors, designed from "a consumer's perspective," attracts a more affluent type of customer than Sears does, he said, adding that there is "no cannibalism of Sears."
Investing behind "winning franchises" such as The Great Indoors was only one of four key initiatives. Sears will also be focused on productivity and returns, become more customer-centric and develop its management team.
"We're trying to fix our retail performance," Lacy said. "While we're doing okay, it's not as well as we'd like it to be." As a result the company will narrow its focus and "do fewer things better."
Looking ahead to 2002, Lacy said that Sears will not be as ambitious with The Great Indoors as it will be this year. "We want to make sure it's managed correctly; it's a complicated box to manage." The Great Indoors has about 100,000 square feet of selling space, with sales of $500 per square foot.
He also said that the home fashions/housewares category remains important for Sears. Lacy noted that this area leverages authority in the home, and Sears will build on brand assets, as well as reintroduce mattresses.
Sears' direct-to-customer business was also cited by Lacy as a growth vehicle. "We're leveraging off a very successful online business so far." He combined the areas of specialty catalogs, online business and specialty merchandise direct mail under one management, and now will be able to take full advantage of assets.
Hardlines are well represented on the website, he said, and there are some opportunities in softlines, but it won't be as broad.
Lacy also touched on Sears' 89 recently announced store closings. These included four full-line stores, a small number compared to the total full-line stores of 860, and Lacy pointed out that it "suggests our core assets are viable."
Sears is "trying to move from a transition focus to a lifetime value focus," he said.
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