Once the world's biggest retailer, Sears has seen its market steadily eroded by mass-market discounters such as Walmart and Target. Sears probably suffered more than most other traditional retail groups, especially during the 1990s. But after two decades of inconsistent retail strategy, the group appeared to have made a substantial recovery by 2004. At the end of that year, Sears launched itself in a new direction by announcing plans to merge with discount retailer Kmart to create what was then a $50bn-plus giant, under the control of former hedge fund manager Ed Lampert. The enlarged group became one of the biggest "broadline" retailers in the US, selling a wide range of products from household appliances and tools to fashion and furnishings, but sales drifted steadily lower after the merger. However, in the 16 years since, Lampert has presided over a slow motion car crash, as massive under-investment in the business and competition from online and other stores led to a steady decline in store traffic and sales. To keep the company afloat, Lampert has systematically sold off any corporate assets of value, including mail order retailer Lands End and Sears Outlet stores, either to other entities controlled by his own investment company ESL, or to third party bidders, as in the case of Craftsman tools to Stanley Black & Decker. In a bid to retain its remaining customers, the group launched loyalty program and "social shopping experience" Shop Your Way, which offers generous benefits on spending, despite the company's financial woes. In 2017, Sears' operations in Canada went into liquidation with the closure of all stores. For the year to Feb 2018, group revenues were $16.7bn, having fallen by half in five years and by two-thirds since 2005. Net loss was $383m, the group's seventh consecutive deficit. Finally, towards the end of that year, Sears Holdings accepted the inevitable and filed for bankruptcy protection. Under the umbrella of new company TransformCo, Lampert bought out 425 of the best Sears and Kmart stores for $5.2bn, as well as Kenmore appliances and DieHard auto batteries; the other stores were liquidated. However legal battles are ongoing between his new streamlined company and the liquidators over inventory, rights and outstanding payments. New Sears is also being sued by Stanley Black & Decker over its continued use of the Craftsman brand name, and there are continuing reports of stock shortages, empty shelves and unhappy employees. DieHard too was sold at the end of 2019. More than half of TransformCo's already reduced estate are already shuttered or marked for closure. Lampert was obliged to step down as CEO of the New Sears but remains controlling shareholder. The business is run by a three-person "office of the CEO".
Capsule checked 6th March 2021
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Historical profile information for Sears
Adbrands Daily Update 18th Mar 2020: One has to wonder why on earth Ed Lampert hasn't already just walked away from the slow motion carcrash that is Sears/Kmart. Instead, he keeps selling off whatever few assets remain to keep funding what must surely by now be a hopeless case in anyone's eyes. The latest disposal is the sale to Costco for $1bn in cash of Innovel Solutions, the distribution, delivery and installation firm that has remained until now a subsidiary of Lampert's new Transform HoldCo entity.
Adbrands Daily Update 27th Dec 2019: The Sears meltdown continues: DieHard is the latest asset to be offloaded as owner Ed Lampert struggles to staunch the hemorrhage of cash. Advance Auto Parts has acquired the widely known car battery brand for $200m in cash. Sears will continue to sell the brand in its own dwindling retail network, and has rights to use the brand for non-auto brands such as footwear.
Adbrands Daily Update 8th Nov 2019: Sears Holdings announced the closure of almost another 100 Sears and Kmart stores by early 2020. By Feb next year, the company's entire retail estate will have shrunk to 182 locations, down from 425 in Feb this year and from almost 2,000 in 2014.
Adbrands Daily Update 28th Oct 2019: In its latest struggle to generate cash to stay afloat, Sears hired bankers to seek a buyer for its DieHard automobile battery business, one of its last remaining proprietary brands. It also still owns Kenmore appliances, having tried and failed to find a buyer since 2016.
Adbrands Daily Update 14th Oct 2019: Almost nine months after its "rescue" through a bankruptcy filing, Sears continues to struggle with declining performance. According to the Wall Street Journal, "Roughly a quarter of the 425 Sears and Kmart stores that financier Edward Lampert bought out of bankruptcy have closed or are closing, according to people familiar with the situation, a retreat the chains haven't fully disclosed. The shelves at some remaining locations are bare of crucial products - no lawn mowers in summer or garden supplies in spring, according to shoppers and a former executive." Crucially, Sears has had difficulty persuading some suppliers who had cut ties with the chain during bankruptcy to start trading with it again. As a result, according to marketwatcher TraQline, Sears' dollar share of the US major household appliances market it once wholly dominated has plunged. Between 2016 and 2Q 2019 it had fallen from the #1 position in major appliances to 4th place behind Lowe's, Home Depot and Best Buy.
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