What Lies Ahead for Sears' Store Brands?

January 3, 2012

Only three days into the New Year and Sears Holdings is facing many challenges and changes with the slated closure of 120 Sears and Kmart stores, the appointment of a new chief merchant and questions bubbling up about the future of the company’s store brands.

Sears image What lies ahead for Sears is uncertain, but the addition of Ron Boire, executive vice president, chief merchandising officer and president of both Sears and Kmart formats, indicates the retailer may be getting serious about its legacy hardline private label brands. Boire was most recently president and CEO of Brookstone.

"We are in the midst of a transformation of our business, from top to bottom, as we seek to become the leading integrated retailer in the country," said Lou D'Ambrosio, Sears Holdings' CEO and president. "By attracting someone with Ron's significant experience in retail, merchandising and product development as well as in leading companies through turnarounds, we're adding a key talent in accelerating our transformation."

Before heading Brookstone, Boire was president, U.S. Toys, North America for Toys R Us from 2006 to 2009, overseeing merchandising, marketing and operations. Prior to that Boire spent 17 years at Sony and several years at Best Buy.

Store Brands Equity
Sears has made moves to expand its store brands beyond its own stores. Sears recently struck deals to sell Craftsman tools at Costco stores and is expanding a program that does the same at Ace Hardware stores. In September, Sears announced plans to sell DieHard Gold auto batteries at Meijer discount stores. There have been no announcements about selling Kenmore appliances at other retailers, but plenty of speculation.

Craftsman image “Sears’ parts are greater than the whole,” Jack Hendler, president of Net Worth Solutions, a merger and acquisition advisory firm told The Street. They have valuable intellectual property and brands like Land’s End, Craftsman and Kenmore, that they could utilize if things got really bad.”

Handler also mentioned the possibility that Sears could sell one of its iconic store brands, calling out LG as a potential buyer. “They would love a U.S. brand,” he told The Street. To pick up an iconic U.S. brand like Kenmore would be a big win for them.”

There may be more store closing to come as Sears nears the end of its fiscal year. “We will carefully evaluate store performance going forward and act opportunistically to recognize value from poor performing stores as circumstances allow,” according to a statement. “While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment.”

"We have made some difficult decisions recently and will make the hard choices necessary to turn our business around going forward,” D'Ambrosio said. “At the same time, we will continue to invest to better serve our customers by delivering world-class, integrated experiences across our stores, our online sites, our services and our mobile capabilities.”

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Keywords: exclusive brands, private label equity

Comments (1) - Post a Comment

Sears Holdings have three things going for them. First the Kenmore brand, second the Craftsman brand and last SOME real estate locations. Beside those, Sears is yet another company on life support. Another example of a quality name, that once was a leader in retailing, but due to poor management and poor merchandising will fall just like Wards and others.PS WalMart tried to buy there brands several years, but Sears didnt want to sell their crown jewels, and now they are selling them at Ace, OH my....

R Anderson at 5:26pm EST - January 3, 2012

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