JC PENNEY’S BRINGS DIY COMPETITION TO HOME DEPOT, LOWE’S, BEST BUY AND SEARS

JC Penny’s announced Monday that they will be doing a major expansion into home appliances. Starting in July, JC Penney’s will add an appliance showroom to almost 500 of its stores. The showrooms will feature kitchen and laundry appliances from Samsung, LG, GE Appliances, and Hotpoint, with over 100 appliances on display.

“Since launching major appliances in 22 stores last February, the response has been outstanding,” said Marvin R. Ellison, CEO, JC Penney’s. “The pilot confirmed that we should not limit our business to apparel and soft home in order to achieve significant revenue growth.”

The retailer also plans to allocate additional 25% of floor space to window coverings in about 500 stores, and pilot a new furniture line, Signature Design by Ashley, from Ashley Furniture, in 25 stores.

JC Penney’s is also testing an in-store flooring concept with Empire Today in stores in Tampa, Florida, and Washington, D.C., beginning this summer. "The current housing market presents a lucrative opportunity to diversify our Home assortment and strategically align with consumer spending patterns,” Ellison said.  “By combining our soft home and window coverings merchandise with the industry`s leading brands for appliances, furniture and flooring, JCPenney will become a destination for home design and redecorating, allowing us to weather-proof our business during seasonal periods of the year."

Source: Chain Store Age

OMNI-CHANNEL SWITCHEROO: ONLINE RETAILERS GET PHYSICAL WHILE RETAIL STORE STALWARTS SHRINK

Amazon.com opened its first brick-and-mortar store in Seattle in November, and announced plans to open another store in San Diego. Macy’s announced it is shutting down almost 40 stores this year. Kohl’s plans to follow suit and close 18 stores, stating its online sales increased 30% in the fourth quarter, causing their reevaluation of its store footprint. Similar announcements of closing stores were also made by Sears, JC Penney and The Gap, as 8% of total US retail sales are now online.

Companies that began their retail lives online, such as Athleta, Fabletics and Birchbox are now adding brick-and-mortar stores. They are moving into prime real estate that was once reserved for top-performing retail stores, such as Birchbox opening its first store in Manhattan.

Is this the new evolution of retail, blending the two worlds? Experts say the trend will continue to grow. The impact will be different in each retail category, such as electronics versus clothing. "For most products, consumers actually prefer to shop in store because they want to see and touch what they're buying," said Dave Parro, vice president of the retail technology practice at Walker Sands, a PR marketing firm. "But they also shop online regularly because of the convenience and range of products available."

The winners of the switcheroo? The consumer. Those who are omni-shoppers know which retail channel and retailer is best to fit their needs.

Source: Philly.com, WSJ

CONSUMER SATISFACTION WITH RETAIL IS ON A DECLINE

The American Consumer Satisfaction Index (ACSI) reports that consumer satisfaction with retail is on the decline for the first time in four years.

The ACSI report states brick-and-mortar customer satisfaction fell flat or weakened, while Internet retail is up from last year. By category, overall satisfaction with department and discount stores stayed flat at 77, while the gap between best- and worst-ranked companies grew. Nordstrom was the top rated, gaining 4% to 86. They are followed by Dillard’s (81), Kohl’s (-1% to 80) and Macy’s (79). Walmart dropped 4% to 68 and is at the bottom of the category behind Target (+4% to 80), Meijer (78) and Sears (-5% to 73).

Among home improvement chains, Lowe’s rated best at 81, while Home Depot falls to the category’s bottom dropping 4% to 76.

Amazon remains at the top of the Internet sector, at 86. Netflix improved for the third straight year gaining 3% to 81. Overstock and eBay both dropped to 77 and 79, respectively.

The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the US. The ACSI uses data from 70,000 customers annually for measuring satisfaction with more than 230 companies in 47 industries.

Resource: Retailing Today

Another Loss For Sears Holdings

August 21, 2014

Describing second quarter earnings as "unacceptable," Sears Holdings chairman and CEO Edward Lampert added that his company's transformation is continuing and online sales are growing.

The company reported second quarter net loss of $573 million, compared with a loss of $194 million in the same quarter last year.  Revenues decreased $858 million to $8.0 billion for the quarter ended August 2, 2014.

"We are taking steps to address our performance on several levels," Lampert said.  "This includes reducing costs as we evolve our business model, investing in our Shop Your Way and Integrated Retail customer initiatives, rationalizing our physical footprint and improving pricing and promotions."

The revenue decrease included the separation of the Lands' End business, which was completed in the first quarter of 2014 and accounted for $330 million of the decline.  The revenue decrease also included the effect of having fewer Kmart and Sears full-line stores in operation, which accounted for $256 million of the decline, as well as a decrease of $140 million at Sears Canada.

Sears also experienced a revenue decline in its Home Services business during the quarter, as well as a decline in delivery revenues.

Sears full-line stores experienced comparable-store sales growth of 0.1% for the quarter as compared with a decline of 0.8% in the second quarter of last year, despite the continuing impact of consumer electronics industry trends.

Kmart comparable-stores sales were down 1.7% for the quarter as compared with a 2.1% decline last year.

Sales to Shop Your Way members in Sears full-line and Kmart stores increased to 73% of eligible sales, up from 71% during the second quarter last year.  Online and multichannel sales grew 18% over the prior-year second quarter and 22% over the prior-year first half.

"We continue to evaluate our Sears Auto Center business, as well as our 51% interest in Sears Canada, including a potential sale of our interest of Sears Canada as a whole," the company said.

Source: Retailing Today

Unseasonably Cold Weather Delivers Challenging Q1 To Sears Hometown

June 6, 2014

Sears Hometown and Outlet Stores CEO and president Bruce Johnson cited weather and promotions as factors affecting the retailer's first quarter results.

Net sales in the quarter decreased 1.9% to $589.9 million from $601.1 million in the first quarter of 2013, driven primarily by a 6.2% decrease in same-store sales.  Lower initial franchise revenues and lower liquidation revenues on end-of-season mark-out apparel merchandise received from Sears Holdings also negatively impacted net sales.

"First quarter results were affected by three main factors: weather," said Johnson.  "For the second year in a row, lawn and garden sales were negatively impacted by an unseasonably cold spring in many of our trade areas that dampened sales in March and April, following a very cold February that reduced overall store traffic and sales; continued lower margins in Outlet due to insufficient quantities of higher-margin, 'as-is' appliances; and a heavily promotional appliance retail environment where appliance retailers layered free delivery on top of discounted pricing."

Repeat visits decreased 1% year-over-year but bounced back from a low in April.  Analysis indicates this rebound is another positive sign for sales.  The best day of the month was Thursday, May 29, with outperformance across all metrics.  The worst day of the month was Sunday, May 4, which saw significant underperformance in traffic.  In addition, fewer than expected repeat shoppers were seen on this day.

Source: Retailing Today

Sears To Close 80 Stores After Loss Widens In First Quarter

May 22, 2014

Sears plans to close at least 80 stores this year after widening its loss in the first quarter of fiscal 2014.

Although same-store sales increased 0.2% for the quarter, the company's net loss climbed to $402 million from $279 million in the prior-year quarter.  Revenues declined 7% to $7.9 billion, from $8.5 billion in the prior-year quarter.

Sears attributed its continued decline in revenue to the closure of Kmart and Sears full-line stores, as well as the divestiture of its Lands' End business.  But according to a Reuters report, analysts pointed to the effect of promotional transactions on gross margin, with one analyst going so far as suggesting that the company's new business model - namely Shop Your Way - may be doing more harm than good since the company offered deep discounts on "already promoted, low-margin items."

"Sears is undergoing a significant transformation, and we fundamentally are changing the way we do business," said chairman and CEO Edward L. Lampert.  "Our performance in the first quarter highlights the challenges we are facing as well as the progress we are making in this transformation.  We are moving away from a company that was heavily based on selling products solely through a store-based network to a member-centric business model focused on providing benefits to our members anytime and anyplace.  We are seeing progress in our transformation to a member-centric, integrated retailer, as we continue to invest heavily in driving our Shop Your Way program."

Source: Retailing Today

Sears Looks To Sell Itself In Canada

May 14, 2014

Sears Holdings plans to hire an investment banking firm to explore strategic alternatives regarding its 51% ownership stake in Sears Canada.

The strategic alternatives are said to include the potential sale of Sears Holdings' interest or Sears Canada as a whole, according to a statement by the Hoffman Estates, Illinois-based company.  In a separate statement, Sears Canada said its board of directors intended to cooperate fully with Sears Holdings in the strategic alternatives exploration process to achieve full value for all shareholders.

Sears Canada is a separate publicly held company that operates 176 Sears stores, 233 hometown deal stores, seven Sears home services showrooms and approximately 1,400 catalog and online merchandise pick-up locations in Canada.

Sears Canada sales during the 13 week fourth quarter ended February 1, 2014 declined 9.6% to $1.18 billion compared to $1.3 billion during the 14 week period the prior year.  Same store sales also declined 6.4% due in large measure to extensive store closures related to severe winter weather.  Full year sales for the 52 week period declined 8.2% to nearly $4 billion from $4.3 billion during the 53 week prior year fiscal period.  Same store sales for the year fell 2.7%.

Source: Retailing Today

Kenmore And Craftsman Can't Help Sears

March 14, 2014

Sears Hometown and Outlet Stores said Fourth-quarter same-store sales declined 3.4% as two of the company's best known brands had disappointing results. 

Sales in the fourth quarter declined 4.5% to $602.4 million due to the combination of a 3.4% same-store sales decline and an extra week in the fourth quarter the prior year, which added sales of $36.5 million.  The same-store sales decline was made up of a 4% decline at the Hometown division and a 1.5% decline at the Outlet division.

The comp decline was primarily driven by lower consumer electronics sales following a planned exit from the category in most Hometown stores, lower sales in the tool category in both segments, lower apparel sales in Outlet stores and lower major appliance sales in Hometown.  The decreases were partially offset by higher lawn and garden sales in Hometown and higher major appliance and furniture sales in Outlet.  If consumer electronics are excluded from the comp calculations, the total decline was only 1.1% overall, consisting of a 1% decrease at Hometown stores and a 1.3% decrease at Outlet stores.

"Fourth quarter results were disappointing, especially in the Hometown and Hardware segment where holiday sales and margins of our important Kenmore appliances and Craftsman tools significantly underperformed management's expectations," said president and CEO Bruce Johnson.  "In the Outlet segment, increased holiday promotional spending did not drive the expected sales increases.  Total company January sales were negatively impacted by the unusually severe winter weather in many of our trade areas." 

That said, Johnson noted that the company made significant progress on four key strategic fronts during the quarter that leave it favorably positioned for 2014.  For starters, Johnson said 30 new stores were opened during the past fiscal year with half of those coming in January.  "Total sales from these 30 new stores during the first quarter of 2014 to date have met our expectations, with particularly strong sales from the new Outlet Stores, which accounted for 13 of the 30," Johnson said. 

The company also continued its transition to a model whereby stores are operated primarily by independent dealers and franchises.  After 19 conversions in the fourth quarter, 1,115 of the company's 1,260 stores are now operated by dealers and franchisees.  Johnson also said the company achieved double-digit year-on-year growth in both online and multichannel sales, particularly at Searsoutlet.com, where sales for the quarter grew nearly 80% from the prior year to approximately $11 million.

Finally, new Outlet sourcing initiatives began to shift inventory positions in furniture, apparel and out-of-box appliances, to products Johnson said he is confident will deliver higher overall merchandise margins than in the fourth quarter of 2013.

Source: Retailing Today

Sears Narrows Loss In Fourth Quarter

February 27, 2014

As far as sales go, Sears Holdings didn't have a very happy holiday.  But the company was still able to narrow its loss for the fourth quarter, as it lowered expenses and reduced inventory.

The company said the costs of transforming into a member-centric retailer using an integrated online platform and the omnichannel Shop Your Way membership program fueled its net losses.  It attributed declining revenues to lower same store sales and having fewer stores in operation.

Sears lost $358 million for the period ended February 1, compared with a loss of $489 million a year ago.

Sales dropped 14% to $10.6 billion, from $12.3 billion.  Same store sales fell 6.4%.  At Sears stores, the metric was down 7.8%.  It fell 5.1% at Kmart.

For the fiscal year, Sears reported a net loss of $1.4 billion, compared to a $930 million net loss in the previous fiscal year.

Revenues also declined during the fourth quarter and fiscal year.  Quarterly revenues dropped 14% to $10.6 billion from $12.3 billion, and annual revenues declined 9% to $36.2 billion from $39.9 billion.  Same store sales declined 3.8%, with decreases of 3.6% at Kmart and 4.1% at Sears Domestic.

"During 2013, we made progress in our continuing transformation into a member-centric retailer leveraging Shop Your Way and integrated retail, which we believe will position us for enhanced growth and profitability to create long-term shareholder value," said Edward S. Lampert, Sears Holdings' chairman and CEO.  "Our full year results are impacted during this transformation as we continue supporting traditional promotional programs and marketing expenditures while we invest in our Shop Your Way program and integrated retail strategy.  We have been investing hundreds of millions of dollars annually in our transformation and will continue to invest in the future of the company."

The company said it continues to explore "strategic alternatives" for its auto centers and Lands' End business.

Source: Retailing Today

Sears Launches Pickup Service For Online Purchases

February 10, 2014

Sears has launched a new service powered by the chain's Shop Your Way mobile app that enables customers to pick up their online purchases at any Sears store within five minutes of arrival.  The service allows members to pick up purchases without leaving their cars, hence its name: In-Vehicle Pickup.

"The In-Vehicle Pickup option takes our 'Free Store Pickup - Ready in 5' guarantee even further and out to the parking lot," said Leena Munjal, SVP, member experience and integrated retail, Sears Holdings.  "In-Vehicle Pickup on this scale is an industry first and another example of how we are constantly innovating and adding benefits that make shopping a more convenient experience for our members."

To take advantage of the new service, Shop Your Way members shop online, completing their purchase via computer or tablet.  At check-out, they choose In-Vehicle Pickup and input details of the vehicle they will arrive in, then sign in to their Shop Your Way mobile app and enable location services before leaving for the store.  Upon arrival at their local Sears, members pull up to the In-Vehicle Pickup spots located conveniently outside of the merchandise pickup location; use the Shop'In feature in the Shop Your Way mobile app to initiate In-Vehicle Pickup - a timer will start on the phone; and five minutes later or less an associate takes the purchase to the car and verifies it by using the payment method used online.

"When the transaction is complete, members can easily provide instant feedback on their experience through the Shop Your Way app," Munjal said.  "This feedback is extremely valuable as it helps us further enhance our capabilities across all channels."

Source: Retailing Today

Store Traffic Declines

The growth of e-commerce and the omni-channel retail strategy appears to be having a significant impact on retail store foot traffic according to ShopperTrak.   An article in today’s WSJ highlights the issue  “Retailers got only about half the holiday traffic in 2013 as they did just three years earlier, according to ShopperTrak, which uses a network of 60,000 shopper-counting devices to track visits at malls and large retailers across the country. The data firm tracked declines of 28.2% in 2011, 16.3% in 2012 and 14.6% in 2013.”  Urban Outfitters Inc. CFO Frank Conforti commented on an investor conference call “The reality is, we just don’t see that changing.”

These changes in store foot traffic may explain part of the reason retailers like Home Depot Inc, Gap, and Sears Holdings are closing stores or cutting back new store openings.  As fewer consumers show up to walk the isles retailers do not need as much retail space.  Only 44 million square feet of retail space opened in the 54 largest U.S. markets last year, down 87% from 325 million in 2006, according to CoStar Group, Inc., a real-estate research firm.

Sears Holdings Corp Holiday Sales Down

Sears Holdings Corp announced sales at comp stores at Sears stores were down 9.2% in the nine weeks that ended January 6 and down 5.7% percent at Kmart stores. 

Sales at the company have been falling since 2005, when billionaire hedge fund manager Edward Lampert merged the two U.S. chains in an $11 billion deal.

"The results that we posted are not nearly what we want them to be," Lampert, Sears Holdings' chief executive officer and top shareholder, wrote in a blog post.

The company has made a big bet that its strategy to make targeted offers through digital and social means to members of its "Shop Your Way" rewards program, which generated about 69 percent of holiday sales, can fix the company.

In his blog, Lampert lamented that the holiday results "overshadow" the progress Sears had made with the program.

Lampert told Reuters in November he saw room for further store closings in 2014.

Sears to Spin-Off Lands' End

HOFFMAN ESTATES, Ill., Dec. 6, 2013 /PRNewswire/ -- Sears Holdings Corporation (NASDAQ: SHLD) announced that, in connection with its previously announced consideration of a separation of its Lands' End business, Lands' End, Inc. filed today a registration statement on Form 10 with the Securities and Exchange Commission. Sears Holdings intends to spin off its Lands' End business through the pro rata distribution of all of the shares of common stock of Lands' End, Inc. We expect that the spin-off will be tax-free to U.S. stockholders except for any cash received in lieu of fractional shares. The spin-off is subject to the approval of the Board of Directors of Sears Holdings and the satisfaction of certain other conditions. Sears Holdings may, at any time until the spin-off, decide to abandon the spin-off or modify or change the terms of the spin-off. Holders of Sears Holdings common stock as of the record date for the spin-off will not be required to make any payment, surrender or exchange any shares of Sears Holdings common stock or take any other action to participate in the spin-off. Additional information concerning Lands' End and the proposed spin-off is contained in the registration statement on Form 10.

Sears to Unload Stores

Hedge fund manager Edward Lampert announced Thursday he intends to sell off some 1,200 Sears stores in an effort to raise $770 million in cash.   Some are looking at this as the start of a breakup and a reversal on the past seven years spent trying to integrate Kmart and pull the company out of the doldrums.   Sears plans to sell off 11 full line stores to General Growth Properties, 1,061 hometown stores, 116 outlet stores and 96 hardware stores.

The 126 year old brand has been losing market share to Wal-Mart, Macy’s and Home Depot for many years as it struggled to find an identity in a competitive market and seemed to confuse consumers with its marketing messages.   But Sears still has some very strong brands like Craftsman, so it’s not impossible to think with a cash infusion and some improved merchandising and marketing, they can turn it around.  Among our customers who we provide Sears POS reporting for, they are in some cases realizing strong sales, in particular hardware and apparel basics.

So what are your thoughts?  Beginning of the end or can Sears turn it around?

Sears EDI 852 Reporting

If you are a vendor supplying to Sears, you are eligible to receive product sales activity and inventory data via EDI 852. Preparing to setup and receive the EDI 852 files can be confusing, and creating usable reports for your team can be very time consuming. Fortunately, Accelerated Analytics® provides a simple, outsourced service for all your Sears EDI 852 reporting needs.

Using Accelerated Analytics® makes all your reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all Sears store data on all your SKU's into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand 

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our EDI 852 reporting is the best on the market.