Stanley Black and Decker to buy Craftsman

The latest in a recent flurry of moves to raise cash, Sears Holding announced Thursday that it will sell its well-known Craftsman tools brand to Stanley Black and Decker. The value of the deal could top $1 billion.

Stanley will pay $525 million up front - the deal is expected to close later this year - and another $250 million at the end of year three. Stanley will also pay Sears a percentage of its new sales of Craftsman products for 15 years, and Sears will continue to sell Craftsman-branded products through a perpetual license deal, which will be royalty-free for the first 15 years, and royalty-bearing after that.

"This agreement represents a significant opportunity to grow the market by increasing the availability of Craftsman products to consumers in previously underpenetrated channels,” said Stanley President and CEO. “We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online.”

Sears, once an icon of American retail, has reported declining sales for years. In addition to the Craftsman deal they also announced plans to close 150 more of their struggling Kmart and flagship Sears stores.

Sears CEO Eddie Lampert said that Sears “will continue to take actions to adjust our capital structure, meet our financial obligations and manage our business to better position Sears Holdings to create long-term value."

Sources: CNN, Chicago Tribune, HBS Dealer

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

Study Shows Department Stores Should Close Locations to Restore Productivity

According to new research by Green Street Advisors, department stores need to close hundreds of locations to recapture the level of productivity they had a decade ago in 2006. The real-estate research firm estimates that approximately a fifth of all anchor space in U.S. malls, or roughly 800 stores, could be a part of the closures.

As retail business has shifted to discounters or online merchants like Amazon.com in recent years, many large retailers have closed locations. Sears recently said it would close 78 stores including 68 Kmarts this summer as part of a plan that was announced in February. But according to Green Street, Sear would need to close 300 or 43% of its stores to regain the sales per square foot that it had in 2006.

To return to 2006 productivity levels, Green Street estimates that JC Penney would need to close 320 stores (31%), Nordstrom Inc. would need to close 30 stores (25%) and Macy’s, which closed 40 stores last year, would need eliminate an additional 70 stores (9%). 

Sales at U.S. department stores averaged $165 per square foot in 2015 which represents a 24% drop since 2006. But stores only reduced their physical footprint by a total of 7% over the same time period.

“Department stores used to be a great catchall for different brands, but today many of the brands have stores of their own, and shoppers can also find them online,” said DJ Busch, a senior Green Street analyst.

The stores have declined to comment on the Green Street Report, but have indicated that closing a large number of stores isn’t the right strategy to improve productivity in today’s dynamic retail market.

“There’s a misperception out there that when we close a store, that business transfers online,” Ed Record, Penney’s chief financial officer, told analysts in November. “When we close a store, particularly in a small market, we see our dot-com business go down.”

Macy’s has attempted to lure shoppers into their stores by adding Bluemercury beauty shops and Backstage discount stores to it’s department stores, and a spokesman for Nordstrom said that all of its stores are profitable, and closing stores “is not our normal practice.”

Source: The Wall Street Journal

Retailers Home Depot, Sears, Kohl's and JCPenney Among Winners of EPA Star Partner Awards

The US Environmental Protection Agency and Department of Energy will be hosting its annual Energy Star Partner of the Year awards in Washington, DC, on April 20. Of the approximately 16,000 companies who partner with the EPA on their broad-based energy efficiency program, 128 companies are being recognized as Energy Star Partners of the Year.

Retailers among the 128 winners include Home Depot, Sears, Best Buy, Kroger, Kohl’s, Food Lion, Staples and JC Penney. “Energy Star Partner of the Year Award winners are delivering advanced energy efficiency solutions that help American families and businesses save money by saving energy. Their efforts play an important role in protecting the environment by reducing greenhouse gas emissions, while also moving our nation closer to a clean energy future.” said Department of Energy Secretary Ernest Moniz. Adds EPA Administrator and event key note speaker Gina McCarthy, “Our Energy Star Partner of the Year award winners demonstrate that energy efficiency is a smart business decision that supports their bottom line, and helps their customers save money and energy.”

Source: 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

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 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.