Sears Clears the Aisles, Maybe More

Sears stores were awash in seas of yellow clearance signs during September as the retailer sought to empty stores of seasonal merchandise at summer‘s end.The massive clearance sale touched nearly every department, with ceiling signs promising savings of up to 75% off the original prices. Men’s summer apparel was discounted at 60% and up, with T-shirts selling for $2.99 to $4.99. Women’s dresses, tops and outerwear were discounted by as much as 50%, as was general merchandise such as comforters and even select Kenmore appliances.More sedate clearance sales hit sears.com in September and October, offering between 5% and 20% off categories including furniture, fitness equipment, tools, automotive parts and jewelry. Additional clearance discounts were applied to thousands of “Already Reduced Items,” according to the website.But the big news out of Sears headquarters in September was the unveiling of licensing agreements to begin selling private-label Craftsman tools through Costco warehouse clubs and DieHard batteries in Meijer discount stores (but not on those retailers' websites).The deal with Meijer marks the first time that DieHard is being sold outside of Sears (or sister chain Kmart) in the retailer’s 112-year history. But a company precedent was already set in 2010, when Ace Hardware stores began selling Craftsman products. (See “Ace Hardware …” in Related Articles.)Costco began selling Craftsman power tools, hand tools and garage storage items in early September. Meijer began selling DieHard batteries in September, after rolling out portable power chargers and jumper cables under the brand name (but manufactured by Dorcy International through a licensing deal with Sears) earlier in 2011.Kenmore could be next, according to reports. A late-September article in The Wall Street Journal reported that Sears was looking to hire an executive whose duties would include marketing appliances through external channels. A Sears spokesperson did not refute the possibility.The Journal also reported that the struggling department store chain is looking to lease space inside stores. Sears spokesperson Kimberly Freely told the Institute that while this was correct, such subleases are business-as-usual for the company. “We are always re-evaluating our space requirements on a store-by-store basis,” she said. “Consumer needs change in various markets, so we might change the merchandise mix, eliminate some lines, and wind up with space available for lease.”Sears recently leased 34,000 square feet in a Greensboro, NC, store to Whole Foods and 41,000 square feet to Forever 21 in a Costa Mesa, CA, location. “We will continue to look for such opportunities where warranted,” said Freely.Times have been especially tough for Sears during the recession. Revenues declined from $53.0 billion in fiscal 2006 to $43.0 billion in 2010.The company also has been downsizing its store base. Since 2008, it has closed 116 full-line Sears and Kmart stores that were larger than 100,000 square feet while adding 224 more specialty stores that are 42,000 square feet or smaller.

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