Does Sears Matter? Its Biggest Critic Says Yes

Jan 10 2014, 1:45pm CST | by

Does Sears Matter? Its Biggest Critic Says Yes

Anyone following retail analyst Brian Sozzi’s Twitter feed knows he’s gunning for Sears. He visits stores and takes pictures of interiors, often messy or poorly merchandised. Then he tweets.

And tweets, and tweets.

On Saturday, Sears Vice President of Corporate Communication, Chris Brathwaite tweeted back. What followed were accusations that Sozzi, of Belus Capital Advisors had an agenda. That he consulted for a competitor or was simply mugging for attention.

Not so, says Sozzi. “We are an independent research firm. My only motive is to bring about positive change.”

He grew up shopping at Sears and says his passion for retail stems from his childhood, growing up with a mother who frequented dollar stores and discounters. Sears is a piece of his past that he is loathe to see wind up in the dustbin of history.

“I always keep in mind where I grew up shopping as a kid,” he says. “We went to Kmart and Sears, and to dollar stores. We were on a tight budget.”

He believes these same shoppers today deserve clean, well-stocked stores like the ones he grew up shopping. “They deserve better than what Sears and Kmart are giving them.” He’s hoping to prompt executives to walk the stores and make changes.

Sozzi has challenged Sears executives to walk stores with him, stores of their choice. “This isn’t a company doing what Sam Walton did, what Mike Duke (Walmart’s CEO) does. They walk the stores.”

In truth, there’s little indication that Sears CEO Eddie Lampert spends much time or money on Sears stores. Brathwaite points to some stores changes as evidenced in Sears’ annual report, moving of cash wraps and some new merchandising, but these are minor efforts with a slight impact.

Sears instead is investing in its online marketplace and the Shop Your Way rewards program, an initiative Sears says engages its best customers.

“We are transitioning from a business that has historically focused on running a store network into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, at home or through digital devices,” says Lampert, in a statement issued alongside a financial update. An update that shows continued declines.

For the full year ending February 1, 2014, Sears expects a net loss between $1.3 billion and $1.4 billion.

Investing in online and membership is appropriate and necessary, but stores need attention too. Those best customers are going into stores, albeit in ever decreasing numbers.

Sears hasn’t opened a store in, well, Braithwaite didn’t know the last time Sears opened a new location (I asked). He takes issue with the idea that all Sears and Kmart stores are unsightly and neglected.
It’s a fair point, with roughly 2,000 locations, not all will be pristine./>

But there are enough of them to give meaning to why those financials are falling quarter after quarter, year over year.

For every unsightly store, there are many more that aren’t, says Brathwaite. And while that may be true, shoppers go to their local store and if it’s a bad experience, they don’t travel to another. They just don’t go back.

Clearly a lot of shoppers aren’t going back. Same-store sales have been declining for years.

Now Sozzi says Sears is in a death spiral.  That it won’t exist in two years, that Sears will be gone by 2017.

Dem’s fightin words. And the fight is going on via national media outlets — Sozzi makes frequent TV appearances — and on social media.

Does Sears matter? Absolutely. There are 2,000 Sears and Kmart locations — physical stores. There are roughly 25,000 employees and scores more retirees that contributed to pensions in good faith.

And people like myself, like Sozzi claims to be, that genuinely feel a connection to Sears and Kmart stores. People who would shop those stores if they stocked more compelling merchandise or were in better physical shape.

I too, grew up with Sears. In its hometown of Chicago. Like Sozzi, we were on a budget and as a single mother in the 1960s, she was unable to get a credit card in her own name. Only Sears would issue her one, an act that won her business and our family loyalty.

I still look up in awe at what was once the world’s tallest building that bore the Sears name. I shopped for back to school clothes at a store now so dark and depressing, I can’t bear to go in, even though it’s blocks from my home.

A home that sits on a street that shares a name with an iconic Sears brand, although which came first is unclear.

I’m a retail geek of the highest order. I hope Sozzi’s wrong.

Sears does matter.

Follow me on Twitter @lfheller and be a part of the conversation.

Source: Forbes Business


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