Sears Holdings

Sears Holdings Corporation
	File:Sears Holdings Corporation logo.jpg
Company type	Department stores Public (NASDAQ: SHLD)
Industry	Retail
Founded	2005 (merger of Kmart and Sears)
Headquarters	Hoffman Estates, Illinois
Key people	Edward Lampert, Chairman; Alan J. Lacy, Vice Chairman and CEO; Aylwin B. Lewis, President and CEO of Kmart and Sears Retail
Products	Brands such as Craftsman, Kenmore, Lands' End, DieHard, Martha Stewart Everyday, Joe Boxer, Jaclyn Smith, Sesame Street
Revenue	$49.124 billion USD (2006)
Net income	$858.0 million USD (2006)
Number of employees	355,000
Website	http://www.searsholdings.com/

Sears Holdings Corporation (Nasdaq: SHLD) is the fourth largest retailer in the United States, behind Wal-Mart, The Home Depot, and Kroger ^[1]. It was formed in 2005 with the purchase of Sears, Roebuck and Company of Hoffman Estates, Illinois by Kmart Holdings Corporation of Troy, Michigan.

The company operates 3,800 retail locations under the mastheads of Sears, Sears Grand, Sears Hardware, Kmart, Kmart Super Center, The Great Indoors, Orchard Supply Hardware, and Lands' End stores.

The company maintains its corporate headquarters in Hoffman Estates, Illinois.

History

In November 17, 2004, Kmart announced its intentions to purchase Sears. As a part of the merger, the Kmart corporation would change its name to Sears Holdings Corporation. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands.

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 comprised of members from the two companies: seven members from Kmart's board, three from Sears. Shareholders in the Kmart Corporation received one share in the new company. Shares of Sears, Roebuck and Company stock was 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.

The Sears Holdings Corporation then re-modeled many Kmarts and Big Kmarts by changing their signage to "kmart." The "K" in Kmart was made lower-case to make Kmarts feel and look more high tech for the 21st century.

Sears Holdings today

The exterior of a typical Sears Essentials.

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, and some new locations were also built. 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.

In 2005, Nike announced that it would no longer allow its products to be sold in Sears stores. Analysts speculated that Nike did not want its shoes and apparel sold in Kmart stores, and terminated its sales agreement with Sears Holdings to prevent this.

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.

Sears Holdings owns 55% of Sears Canada, a large department store chain in Canada, similar to the U.S. stores. Like Target stores, Kmart-branded stores in Australia belong to Coles Myer; Coles Myer also holds the rights to the Kmart brand in New Zealand.

Because Kmart Corporation changed its name to Sears Holdings and because it is converting some Big Kmart stores to Sears Essentials and Grand stores as a test, there is speculation that Sears Holdings may drop the Kmart name entirely in the next decade.

Chains

Current

Kmart: Discount department stores 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 décor, and a limited selection of food items. Many stores also have a pharmacy and snack bar. About 80,000 to 110,000 square feet (7,400 to 10,200 m²). Few traditional Kmart stores still exist, with most having been converted into Big Kmart (also known as Big K).
Big Kmart: Stores carry everything a regular Kmart carries, but with an emphasis on home decor, children's clothing, and more food items. Stores ranged in size from 84,000 to 120,000 square feet (7,800 to 11,100 m²). Big Kmart stores also feature the Garden Shop, and usually have a K-Cafe or Little Caesars Pizza station.
Kmart Super Center: Stores carry everything a regular Kmart carries, but has a full grocery section with meat, produce, bakery, seafood, deli, frozen foods, and dairy. The Super Centers are about 140,000 to 190,000 square feet (13,000 to 17,700 m²). These stores are also known as Super Kmart, Super K, and Super Kmart Center. Several also include Kmart Express gas stations. Less than 60 Super Ks are still open, with most having been closed during the two rounds of closures during 2002 and 2003. ^[2] Some of the surviving Super Ks were those in regions without a strong Wal-Mart presence, including Ohio and Michigan. A typical Super K sells around 30 million dollars of merchandise during one fiscal year.
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: free-standing hardware stores that carry home repair, hardware products and lawn and garden supplies. Orchard Supply Stores are about 40,000 square feet (4,000 m²). There are currently 84 stores, all of them in California. Sears now owns 80.1% of the chain, and revealed intentions in May 2005 to spin it off.
Sears: Mid-range department stores that are located in shopping malls; they carry clothing, jewelry, appliances, hardware, lawn and garden supplies, lawn mowers, paint, sporting goods, automobile repair, office supplies and school supplies. Sears stores are usually multi-level. There are 870 full-size Sears stores in the United States.
Sears Grand: Located away from shopping malls (often free-standing); carries 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, electronics, music, movies, and a full-line of groceries with meat, bakery, deli, frozen foods, dairy, produce and seafood. Sears Grand stores are about 165,000 to 210,000 square feet (15,300 to 19,500 m²) ^[3]. The first Sears Grand and still largest opened at Jordan Landing in West Jordan, Utah in 2003 at 225,000 square feet.
Sears Hardware: Stores that carry the whole line of Sears hardware and are usually freestanding or in strip malls. Typically these stores are about 25,000 square feet.
Sears Hometown Dealer: Smaller Sears stores that are operated as franchises; they are usually located in smaller markets that do not support a mall or full-size Sears. They are signed as Sears, and they are usually free-standing or located in a strip mall. They primarily concentrate on hardware, appliances, and lawn and garden supplies.
Sears Outlet: The outlet version of Sears department stores that are located in outlet malls.
Sears Parts & Repair: Sears service centers that typically sell parts for appliances and also a carry-in point for customers to bring merchandise in that needs 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 has started closing many of these down as more and more of its service and repair business is home-based.
The Great Indoors: Free-standing home décor stores that carry appliances, bedding, and kitchen and bath fixtures. These stores are about 130,000 square feet (12,000 m²).

Former

Sears Essentials: Stores that are about 70,000 to 100,000 square feet (6,500 to 9,300 m²) ^[4]. These stores are essentially Sears-Kmart hybrid stores. Unlike Sears Grand stores, Sears Essentials features groceries without having meat, bakery, deli, frozen foods, dairy, produce and seafood. Sears Essentials was declared a falure and Sears will convert the locations into Sears Grand. ^[5].

Brands

Craftsman-tools
Diehard-car batteries
Kenmore-appliances
Jaclyn Smith-branded clothing
Joe Boxer-branded underwear and home decor
Lands' End-branded clothing
Martha Stewart Everyday-branded home decor, kitchen and home improvement items
Route 66-branded clothing
Sesame Street-branded clothing
Thalía Sodi-branded clothing and jewelry
Ty Pennington style-home decor

Major sponsorships

File:Nascar craftsman truck series logo.jpg

The current NASCAR Craftsman Truck Series logo.

The Sears Holdings Corporation sponsors the NASCAR Craftsman Truck Series using the Craftsman brand as the title sponsor. Craftsman tools are also the official tools of NASCAR.

Diversity

Sears Holdings received a 57% rating on the 2004 Corporate Equality Index published by the Human Rights Campaign.
Sears Holdings was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

References

^ STORES.org list of the top 100 US retailers (as of July, 2006)
^ Kmart At A Glance
^ Sears Grand Fact Sheet
^ Sears Essentials Fact Sheet
^ Sears ditches Sears Essentials name