Not that Sears hasn’t tried. Almost 20 Years ago, Sears recruited a hotshot merchandizer from Bloomingdale’s to court the upscale shopper. That failed strategy begat deeply slashed prices, which begat brightly remodeled stores, which begat “Everyday Low Prices.” Then there were the “power formats,” which gave way to frequent sales promotions, more remodeled stores (remember the “Store of the Future”?) and, currently, “Everyday Competitive Prices.” The result: in five years, sales have climbed only slightly, to $31.4 billion. Meanwhile, revenues soared at competitors like Wal-Mart, the merchant that knocked Sears from the top spot. The basic problem? Sears has never figured out how to parlay its strong reputation for hard goods into sales of soft goods, such as men’s suits. (After all, there’s not much call for Die-Hard ties or Weatherbeater lingerie.) Meanwhile, Sears has also lost shoppers to super-specialty stores like Home Depot.
While Sears is vague about its next move, every industry analyst seems to have the answers to its problems. Some reckon that the stores need more drama-replacing the cold fluorescent lighting is one remedy. It also doesn’t help that sales clerks seem more interested in handicapping the next round of layoffs than selling Kenmore washers. As for store design, consultant Kurt Barnard would force customers heading toward departments like hardware to pass through fashion sections that frequently provoke impulse buys. “Right now they’re making women wade past spark plugs to reach apparel,” Barnard says. Because its once powerful hard-goods line is stagnant, some analysts are even thinking the unthinkable: that Sears should ape a healthy J.C. Penney and become another moderately priced, fashion-oriented department store. (Penney’s perked up its clothing in 1983 and dumped the washing machines.)
A different solution, says consultant Isaac Lagnado, would be to pare whole sections, such as optical departments, and beef up Sears’s best-known hard goods, such as Craftsman tools. “In some areas Sears cannot catch Wal-Mart,” he says. “But building the world’s best power drill is an achievable goal.”
Above all, say the kibitzers, Sears must define a customer base, which used to be middle class, and stick with it. Says James Baum of Morris, Ill., whose 117-year-old family retail business predates Sears by a decade, “The problem is: that customer went upscale and down at the same time. Today he drives a BMW and buys bulk at Wal-Mart.” If Sears retrieves that old customer or attracts new ones, Wall Street will really have something to celebrate. The betting in many quarters is that Arthur Martinez, just hired from Saks by chairman Edward Brennan to rejuvenate the stores, will steer Sears closer to its past: simplicity, quality, value. He can’t move too quickly. Winter is coming and Gretchen needs blankets.
