Sears Holdings: Difference between revisions

Sears Holdings Corporation

File:SearsHoldingPNG.PNG
Company type	Public (Nasdaq: SHLD)
Industry	Retail
Founded	2005 (merger of Kmart and Sears, Roebuck and Company)
Headquarters	Hoffman Estates, Illinois, USA
Key people	Edward Lampert, Chairman Aylwin Lewis, President and CEO of Kmart and Sears Retail William Crowley, CFO
Products	Brands such as Craftsman, Kenmore, Lands' End, DieHard, Martha Stewart Everyday, Joe Boxer, Jaclyn Smith, Sesame Street
Revenue	$49.124 billion USD (2006)
Net income	$858.0 million USD (2006)
Number of employees	355,000
Website	http://www.searsholdings.com/

Sears Holdings Corporation (Nasdaq: SHLD) is the fourth largest retailer in the United States, behind Wal-Mart, The Home Depot, and Kroger.^[1] It was formed in 2005 with the purchase of Sears, Roebuck and Company of Hoffman Estates, Illinois by Kmart Holdings Corporation of Troy, Michigan.

The company operates 3,800 retail locations under the mastheads of Sears, Sears Grand, Sears Hardware, Kmart, Big Kmart, Super Kmart, The Great Indoors, Orchard Supply Hardware, and Lands' End stores.

The company maintains its corporate headquarters in Hoffman Estates, Illinois.

In November 17, 2004, Kmart stores announced its intention to purchase Sears Stores, both divisions of their respective parent organizations. It is mistakenly believed that Sears as a whole was purchased by Kmart; however, this is not true, as after Kmart Stores completed the purchase of Sears Stores, Sears Holdings Corporation purchased Kmart Holdings Corporation. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands.

The two companies cited several reasons for combining forces:

• Sears had begun investing in new, larger off-mall stores, called Sears Grand. Earlier in the year, Sears had purchased dozens of current Kmart locations; the merger permitted the combined company to accelerate that process.
• Proprietary brands held by both companies could be made more accessible to their target demographics by leveraging their combined real estate holdings. This was estimated to be an expected $200 million a year in revenue synergies.
• At least $300 million a year in cost savings was expected annually, particularly in the supply chain and in administrative overhead.
• The establishment of a shared customer-focused corporate culture between the two companies was estimated to yield improvements in revenue per unit area.
• Preservation of two brands after the merger allowed Sears Holdings to continue focusing on different customer demographics, without alienating either group.

The new company is directed by a board of directors composed of members from the two companies: seven members from Kmart's board, and three from Sears. Shareholders in the Kmart Corporation received one share in the new company. Shares of Sears, Roebuck and Company stock were converted into a combination of 55% stock and 45% cash (at $50 a share). Stockholders had a choice of receiving either stock or cash, subject to the predefined ratio.

The merger was completed on March 24, 2005, after receiving regulatory approval from the government and approval by shareholders of both companies.

The Sears Holdings Corporation then re-modeled many Kmarts and Big Kmarts by changing their signage to "kmart." The "K" in Kmart was made lower-case to make Kmarts feel and look more high tech for the 21st century.

Sears Holdings continues to operate stores under the Sears and Kmart mastheads. In 2005, Sears introduced a new store format, called Sears Essentials; Some Kmart stores were converted to Sears Essentials, as well as a few locations that were acquired from Wal-Mart and several bankrupt discount retailers. The new store format combined the Sears store concept with the Kmart format, which was supposed to help the company better compete with Wal-Mart and Target. The project has since been resigned, and merged with the Sears Grand concept.

In 2005, Nike announced that it would no longer allow its products to be sold in Sears stores. Analysts speculated that Nike did not want its shoes and apparel sold in Kmart stores, and terminated its sales agreement with Sears Holdings to prevent this.

Sears Holdings has begun cross-selling merchandise between its two brands. For example, Craftsman tools are now available in Kmart stores; they were previously exclusive to the Sears brand. Martha Stewart products are not sold at Sears, however continue to be sold at Kmart.

Sears Holdings owns 70% of Sears Canada,^[2] a large department store chain in Canada, similar to the United States stores. (Sears Holdings is trying to buy the remainder of Sears Canada it does not own). Like Target stores, Kmart-branded stores in Australia belong to Coles Group; Coles Group also holds the rights to the Kmart brand in New Zealand.

Because Kmart Corporation changed its name to Sears Holdings and because it is converting some Big Kmart stores to Sears Grand stores as a test, there is speculation that Sears Holdings may drop the Kmart name entirely in the next decade.

In November 2006, speculation rolled around as The Chicago Sun Times reported that Sears may buy Safeway, Home Depot, Gap, RadioShack, Pep Boys, or Anheuser Busch.^[3] The Washington Post, in an article dated March 11, 2007, described the current Sears as a hedge fund with money being diverted from the maintenance and improvement of stores to non-retail financial investments. A former executive is quoted as saying the company faces an "uncertain future." Surprisingly, a third of pre-tax income in the third quarter of 2006, according to the Washington Post, was due to financial trades not the retail business. However, these investments performed poorly in the fourth quarter.^[4]

• Kmart is a chain of discount department stores that are usually free-standing or located in strip malls. They carry electronics, music, movies, bedding, hardware, sporting goods, clothing, toys, jewelry, office supplies, health and beauty products, home décor, and a limited selection of food items. Many stores also have a garden center, a pharmacy, and usually have a K-Cafe or Little Caesars Pizza station. Kmart stores range from 80,000 to 110,000 square feet (7,400 to 10,200 m²). Many of these stores were converted into Super Kmart, and most of them were converted into Big Kmart.
• Big Kmart is a chain of discount department stores that carry everything a regular Kmart carries, but with an emphasis on home decor, children's clothing, and more food items. Big Kmart stores range from 84,000 to 120,000 square feet (7,800 to 11,100 m²). Big Kmart stores also feature a garden center, a pharmacy, and usually have a K-Cafe or Little Caesars Pizza station.
• Super Kmart is a chain of hypermarkets that carry everything a regular Kmart carries, but also have a full line of groceries. Super Kmart stores range from 140,000 to 190,000 square feet (13,000 to 17,700 m²). These stores are also known as Super Kmart Center. Super Kmart stores also feature a garden center, a video rental store, a branch from a local bank, a pharmacy, and usually have a K-Cafe or Little Caesars Pizza station. Several also include Kmart Express gas stations. Fewer than 60 Super Kmarts are still open, with most having been closed during the two rounds of closures during 2002 and 2003.^[5] Some of the surviving Super Kmarts were those in regions without a strong Wal-Mart presence, including Ohio and Michigan. A typical Super Kmart sells around 30 million dollars of merchandise during one fiscal year.
• Lands' End aside from carrying the Lands' End clothing line at Sears stores, Sears Holdings also operates 16 Lands' End stores that carry only Lands' End clothing. These stores are located in outlet malls and regular malls.
• Orchard Supply Hardware, known as Orchard or OSH for short, is a chain of free-standing hardware stores that carry home repair, hardware products and lawn and garden supplies. Orchard Supply Hardware stores are 40,000 square feet (4,000 m²). There are currently 84 stores, all of them in California. Sears now owns 80.1% of the chain, and revealed intentions in May 2005 to spin it off. Richard Karn of Home Improvement fame was a spokesman for the chain.

• Sears is a chain of mid-range department stores that are located in shopping malls; they carry clothing, jewelry, appliances, hardware, lawn and garden supplies, lawn mowers, paint, sporting goods, automobile repair, office supplies, electronics and school supplies. Sears stores are usually multi-level. There are 870 full-size Sears stores in the United States.
• Sears Grand is a chain of free-standing hypermarkets located away from shopping malls. They carry everything a regular Sears carries, plus health and beauty products, toys, baby care, cleaning supplies, home décor, pet food, cards and party supplies, books, magazines, music, movies, and a full-line of groceries. Sears Grand stores range from 165,000 to 210,000 square feet (15,300 to 19,500 m²).^[6] The first Sears Grand opened at Jordan Landing in West Jordan, Utah in 2003. At 225,000 square feet, the Jordan Landing store is currently the largest in the chain. Unlike many other hypermarkets in the United States (such as Wal-Mart Supercenters and Meijer), Sears Grand stores are not continuously open.
• Sears Hardware is a chain of hardware stores that carry the whole line of Sears hardware and are usually free-standing or located in strip malls. Typically these stores are about 25,000 square feet.
• Sears Dealer Stores is a chain of smaller stores that are operated as a store where the proprietor owns or leases the real-estate while Sears Holdings handles the marketing and owns the inventory, and there is no franchising fees levied against the store proprietor. These stores are usually located in smaller markets that do not support full-sized Sears. They are signed as Sears and are usually free-standing or located in strip malls. They primarily concentrate on hardware, appliances, and lawn and garden supplies. This was originally intended as a replacement to the now discontinued Sears Catalog.
• Sears Outlet is an outlet version of Sears department stores located in outlet malls.
• Sears Parts & Repair is a chain of service centers that typically sell parts for appliances and also feature a carry-in point for customers to bring merchandise in that needs repaired either in or out of warranty. Typically labeled Sears Service Center or Sears Home Central, two names that also refer to the Parts and Repair centers. Sears has started closing many of these down as more and more of its service and repair business is home-based.
• The Great Indoors is a chain of free-standing home décor stores that carry high end appliances, bedding, and kitchen and bath fixtures. The Great Indoors stores are 130,000 square feet (12,000 m²).
• A & E Factory Services is a joint venture held by Whirlpool and Sears Holdings.^[7] A & E Factory Service is a network of mobile service vans with a long history of performing appliance repairs.^[8]

• Sears Essentials was a chain of department stores that are located away from shopping malls (free-standing); carried everything a regular Sears carries, plus health and beauty products, toys, baby care, cleaning supplies, home décor, pet food, cards and party supplies, books, magazines, music, movies, and a limited amount of food items. Sears Essentials stores were between 70,000 to 100,000 square feet (6,500 to 9,300 m²).^[9] These stores are essentially Sears-Kmart hybrid stores. Sears Essentials was declared a failure and Sears will convert these stores into their Sears Grand format.^[10]

• Craftsman - tools and mens clothing
• DieHard - car batteries
• Kenmore - appliances
• Jaclyn Smith - branded clothing
• Joe Boxer - branded underwear and home decor
• Lands' End - branded clothing and home decor
• Martha Stewart Everyday - branded home decor, kitchen and home improvement items
• Route 66 - branded clothing
• Sesame Street - branded clothing
• Paul Wall Grills - jewelry mouthware
• Ty Pennington style - home decor
• Personal Identity - branded juniors clothing
• Canyon River Blues - branded mens and misses clothing
• Covington - branded mens and misses clothing and footwear
• Winnie the Pooh - branded childrens clothing
• Structure - branded young men's clothing (label originally part of what is now the Express chain, purchased by Sears in 2003)
• BobbyO - Bobby Orlando branded teen clothing
• Apostrophe - branded misses clothing and jewelry
• Parallel - branded misses clothing
• Latina Life - branded misses clothing and jewelry
• Two Hearts - branded maternity clothing
• Celestial Star - branded IGI-certified diamond fine jewelry
• Simply Love - branded diamond solitaire fine jewelry
• Promise Your Love - branded diamond fashion, diamond bridal, and lab created pink sapphire and ruby fine jewelry
• Galaxy - branded discount appliances
• Protron - branded discount electronics
• LXI - discontinued electronics brand

Sears Holdings Corporation sponsors, through the Sears Auto Centers, the Formula D Chris Forsberg (Sears Auto Center 350z Roadster) drift car.

The Sears Holdings Corporation sponsors the NASCAR Craftsman Truck Series using the Craftsman brand as the title sponsor. Craftsman tools are also the official tools of NASCAR.

Sears Holdings Corporation sponsored Extreme Makeover: Home Edition.

Sears Holdings Corporation sponsors and currently has naming rights to the Sears Centre, an arena constructed in 2006 in Hoffman Estates, Illinois.

• Sears Holdings received a 57% rating on the 2004 Corporate Equality Index published by the Human Rights Campaign.
• Sears Holdings was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

• Sears Holdings Corporation Official Website
• Sears Official Website
• Kmart Official Website
• Orchard Supply Hardware Official Website
• Company presentation about the merger
• CNN Money article announcing the Kmart-Sears merger

• Katz, Donald R. (1987) The Big Store: Inside the Crisis and Revolution at Sears Viking Press; New York
• Stevenson, Katherin Cole, and Jandl, H. Ward, (1995) Houses By Mail: A Guide to Houses from Sears, Roebuck and Company John Wiley & Sons; Hoboken, New Jersey
• Turner, Marcia L. (2003) Kmart's Ten Deadly Sins: How Incompetence Tainted An American Icon John Wiley & Sons; Hoboken, New Jersey

• Kmart Australia
• Sears Canada - Canadian unit
• Sears Mexico - Mexican unit