Sears Holdings
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| Company type | Public (Nasdaq: SHLD) |
|---|---|
| Industry | Retail |
| Founded | 2005 (merger of The Kmart Holdings Corporation and The Sears Roebuck Foundation) |
| Headquarters | Hoffman Estates, Illinois, U.S. |
Area served | United States Puerto Rico Canada Mexico |
Key people | Edward S. Lampert (Chairman) W. Bruce Johnson (Interim CEO) & (President) |
| Products | Flagship Brands: Craftsman Kenmore other brands Lands' End DieHard Martha Stewart Everyday Joe Boxer Jaclyn Smith |
| Revenue |  USD 46.770 Billion (2008)[1] |
| USD 1.586 Billion (2007) | |
| USD 826.0 Million (2007)[1] | |
| Total assets | USD 27.397 Billion (2007) |
| Total equity | USD 10.667 Billion (2007 |
Number of employees | 337,000 (2008) |
| Subsidiaries | Kmart (U.S.) Sears, Roebuck and Co. (U.S.) Sears Canada Inc.54.3% (Canada) Sears Roebuck de México S.A15% (Mexico) |
| Website | www.searsholdings.com |
Sears Holdings Corporation (Nasdaq: SHLD) is the eighth largest retailer in the United States, trailing behind Wal-Mart, The Home Depot, Costco, Target, CVS Caremark, Walgreens, and Kroger.[2] It was formed in 2005 by the merger of Sears, Roebuck and Co. of Hoffman Estates, Illinois with Kmart Holdings Corporation of Troy, Michigan[3].
The company operates 3,900 retail locations under the mastheads of Sears, Sears Grand, Sears Essentials, Sears Hardware, Kmart, Big Kmart, Super Kmart, The Great Indoors, Orchard Supply Hardware, and Lands' End stores.
Sears Holdings is still searching for a new CEO since Aylwin B. Lewis left the company in 2007. Other senior executives have also left the company such as the CTO Neil Day-- the former CTO of Walmart.com, Mark Good EVP of Home Services, Corwin Yulinsky EVP Customer Strategy, Maureen McGuire CMO, J. Miles Reidy CFO, Craig Monaghan CFO, David McCreight President of its Lands' End.
The company recently hired a new CIO Timothy Kasbe, and VP of Business Intelligence Architecture, Trenton Parks.
In December 2008, Michael Collins was elected Senior Vice President and Chief Financial Officer. Prior to joining the Company, Mr. Collins served as Senior Vice President, Planning and Analysis, at General Electric Company’s NBC Universal Division from March 2004 to October 2008. Mr. Collins worked in a variety of finance positions in his 18-year career at General Electric Company.
GE Capital, Corporate Retail Finance recently co-led a $4 billion asset-based credit facility for Sears Holdings Corp.
Despite the company's move to increase its financial and technology acumen by adding outstanding leaders, the company is still in need of strong leadership. The company is currently taking nearly 100 days to cycle through its inventory. Moreover, Kmart and Sears distribution centers still remain separate along with many systems.
The company maintains its corporate headquarters in Hoffman Estates, Illinois.
History
Kmart and Sears merger
On November 17, 2004, Kmart Holdings corporation announced its intention to purchase Sears, Roebuck and Co. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands. The merger of Kmart and Sears as Sears Holdings Corporation closed on March 24 2005, following affirmative shareholder votes of both companies. The company’s corporate headquarters is in Hoffman Estates, Ill. Sears Holdings will operate Sears and Kmart stores. The company will continue to market products under brands held by both companies.
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.
Sears Holdings today
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.
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. However, Martha Stewart brand paint colors are now no longer available at Sears.
Sears Holdings owns 70% of Sears Canada,[4] a large department store chain in Canada, similar to the United States stores. (Sears Holdings failed to buy the remainder of Sears Canada that it does not own because Bill Ackman took a stake in it and prevented any takeover.) Sears Holdings also owns 20% of Sears Mexico. (Carlos Slim owns the other 80%.) Like Target stores, Kmart-branded stores in Australia belong to Wesfarmers (which acquired former owners Coles Group in 2007); Wesfarmers also holds the rights to the Kmart brand in New Zealand.
In November 2006, speculation rolled around as The Chicago Sun Times reported that Sears may buy Safeway, Home Depot, Gap, Radio Shack, Pep Boys, Anheuser Busch or all six companies.[5] 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.[6]
On December 14 2007, Sears Holdings submitted a draft merger agreement to buy Restoration Hardware for $6.75 a share. Sears already owns 13.7% of the company. That offer was withdrawn after Restoration's shares tumbled and a competing bid from private equity firm Catterton Partners was lowered to $4.50 per share. On February 28th, Sears Holdings made an offer of $4.55 a share.
Chains
Current
- 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 decor, 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. A small number of Big Kmarts are accompanied by a Kmart Express gas station.
- Super Kmart is a chain of hypermarkets that carry everything a regular Kmart carries, but has a full line of groceries (including meat and poultry, baked goods, delicatessen, frozen foods, dairy products, garden produce and fresh seafood). 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 or simply Super K. 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 50 Super Kmarts are still open, with most having been closed during the two rounds of closures during 2002 and 2003 and further reductions came in 2008, as 5 Super Kmart stores were converted to the Big Kmart format, with the grocery sections being completely removed.[7] Most of the surviving Super Kmarts were those in regions without a strong Wal-Mart presence, including Ohio and Michigan, although one survives in Robinson Township, Pennsylvania just outside of Pittsburgh, which does have a strong Wal-Mart presence. A typical Super Kmart sells around 30 million dollars of merchandise during one fiscal year. Like many Wal-Mart Supercenter locations, Super Kmart locations are open 24 hours a day. [8]
- MyGofer: A new pilot concept recently launched. Browse the in-store "showroom" or order online and have items for pickup there or delivered to your home.[9][10]
- 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 Supply, 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 once owned 80.1% of the chain, and revealed intentions in May 2005 to spin it off. Aries holdings now owns approximately 50% of OSH with an option to buy the remaining shares. Richard Karn of Home Improvement fame was a spokesman for the chain.
- Sears Full-Line is a chain of mid-range department stores that are located in shopping malls; they carry clothing, jewelry, home 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 and 188 in Canada.
- Sears Grand is a chain of free-standing department stores 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 an edited assortment of groceries. Sears Grand stores range from 165,000 to 210,000 square feet (15,300 to 19,500 m²).[11] 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.
- Sears Appliance & 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. In 2005 and 2006, some of these locations closed due to their proximity to, and therefore competition with, nearby Sears department stores.
- Sears Dealer Store 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 are 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. There are 180 dealer stores in Canada.
- Sears Outlet is an outlet version of Sears department stores located in various retail locations across the United States. The stores carry new, one-of-a-kind, out of carton, discontinued, used, scratched and dented merchandise at 20-60% off regular retail price. While a wide variety of products are available, appliances make up a large majority of available merchandise. There are 11 outlet stores across Canada (with one as a liquidatin centre.
- Sears Parts & Repair Center is a chain of service centers that typically sell parts for lawn & garden equipment and appliances and also feature a carry-in point for customers to bring merchandise in that needs to be 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 had previously closed some of these down as more of its service and replacement part business became 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 Service is a joint venture held by Whirlpool and Sears Holdings.[12] A & E Factory Service is a network of mobile service vans with a long history of performing appliance repairs.[13]
- Sears Home improvement showrooms operates in 67 locations across Canada.
Sears Travel offices operates in many Sears main line stores in the United States and 112 in Canada.
Former
- Sears Essentials is 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 are between 70,000 to 100,000 square feet (6,500 to 9,300 m²).[14] These stores are essentially Sears-Kmart hybrid stores. Sears Essentials currently has a pilot program wherein some stores have had the Kmart merchandise (food, health/beauty, stationery, cleaning supplies) removed, Sears merchandise assortment expanded, and the "Essentials" part of the name removed and replaced with the "Grand" name.[15]
Brands
- Craftsman - tools and men's clothing
- Companion - tools (generic tools, none-lifetime warranty)
- DieHard - car batteries
- Easy Living - Interior Paint
- Kenmore - appliances
- Jaclyn Smith - branded clothing and home decor
- 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
- Ty Pennington style // sTYle - home decor
- Weatherbeater - Exterior Paint
- Personal Identity - branded juniors clothing
- Canyon River Blues - branded men's and misses clothing
- Covington - branded men's and misses clothing and footwear
- Winnie the Pooh - branded children's 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
- J.C. Higgins - discontinued sporting goods brand
- Dunlap - discontinued economy priced tool brand
- Sears Tires - Includes The Road Handler, Gaurdsman, Dynaglass, DynaPly, Silent Guard, Sears Crusader, Dyna-Sport, Superwide
- PENSKE - Automotive testing equipment, automotive filters and parts
- The SteadyRider - Automotive Shock Absorbers
- Sears - Sears Branded tools, automotive parts,
- Kromedge - 1955-1991 Tools with super-hard chrome plating
- MAPP - Gas Torch Kits
- Craftsman Home-N-Shop - Wet/Dry vacs
- Homart -
- Hydro-Glass - Jet Pumps
- Coldspot - Refrigerators, Freezers, Humidifiers
- Ted Williams Brand - Guns and accessories
Major sponsorships
Sears Holdings Corporation sponsors, through the Sears Auto Centers, the Formula Drift Darren McNamara Sears/Falken Saturn Sky drift car.
The Sears Holdings Corporation sponsors the NASCAR Craftsman Truck Series using the Craftsman brand as the title sponsor, however after the 2008 season, the sponsorship agreement will come to an end [16]. 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 sponsored the television show "Mister Rogers' Neighborhood."
Sears sponsored the #10 Gillett Evernham Motorsports car of Scott Riggs for the September 2 2007 running of the Sharp AQUOS 500 at California Speedway through its Sears Auto Center branch. However, Riggs failed to qualify for the event.
Diversity
- Sears Holdings received a 100% rating on the 2009 Corporate Equality Index published by the Human Rights Campaign[17], for the forth year in a row.
- Sears Holdings was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.
- Sears Holdings was named as one of the Best Places to Work for LGBT Equality published by the Human Rights Campaign[18], for 2009.
Controversy
Sears Holdings is the target of an Industrial Workers of the World campaign to get the company to stop advertising through Havas' MPG. The union has been protesting outside of Kmart stores[19]. Sears Holding has not commented publicly about the matter.
Further reading
- 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
References
- ^ a b SHLD Income Statement
- ^ list of the top 100 US retailers (as of July, 2008)
- ^ Sears, Kmart to Merge in $11B Deal (washingtonpost.com)
- ^ Sears Holdings raises Sears Canada ownership to 70% from 54%
- ^ Sears may have eye on Safeway
- ^ Washington Post, Risky Side of Sears: Retailer Is Recast As a Hedge Fund, As Sales and Stores Decline, Chairman Focuses on Investment, March 11, 2007
- ^ Kmart At A Glance
- ^ www.superkmart.com
- ^ http://mygofer.com/
- ^ http://www.suburbanchicagonews.com/heraldnews/news/1332887,4_1_JO16_COUNCIL_S1.article
- ^ Sears Grand Fact Sheet
- ^ This Week in Consumer Electronics, Whirlpool Bears First Fruits Of Maytag Merger At Home Depot, 10/09/2006
- ^ Yard and Garden, Filling the gap: now that home centers are "servicing what they sell," where do dealers fit into this rapidly changing retail channel?; Profitably running your service department, March, 2005
- ^ Sears Essentials Fact Sheet
- ^ Sears ditches Sears Essentials name
- ^ KansasCity.com: Craftsman Dropping Sponsorship of NASCAR Truck Series; December 4, 2007
- ^ [1]
- ^ [2]
- ^ MPG Falsely Advertises Workers' Rights, examiner.com, August 11, 2009