‘Attention Kmart – Check That – Sears’ Shoppers’
In a filing with the Securities and Exchange Commission, Kmart Holding Corp. said it plans to convert 400 Kmart stores to Sears’ locations over the next several years. The retailer did not identify stores to be converted or what banner (Sears Essential or Sears Grand) they would operate under.
The store conversions will need to wait getting started until the Kmart/Sears merger is approved by shareholders at a meeting on March 24 at Sears’ headquarters in Hoffman Estates, Ill.
While the news was not a surprise to most of those connected to the retailing industry, it did confirm speculation that has been growing since the merger deal between the two retailers was announced last November.
George Whalin, president of Retail Management Consultants (and RetailWire BrainTrust panelist), told The Detroit News, “It’s the beginning of the end for Kmart. Kmart
is the weaker brand. … The Kmart name eventually goes away.”
Gary Ruffing, a retail consultant at BBK Ltd. and a former Kmart executive, told The Associated Press that some Kmart stores are doing well and he didn’t expect the name to disappear in the near term.
By converting the stores to a Sears’ format, Mr. Ruffing believes the retailer is looking to get out from between the competitive rock-and-a-hard-place Kmart finds itself in, that is between Wal-Mart and Target. The Sears name, he said, allows the stores to offer higher priced merchandise, something it wouldn’t be able to do if it remained under the Kmart banner.
For Tom Yake, retail analyst with Yake & Associates, the store name and format change is little more than window dressing. “The outlook is bleak long term,” he said. “You
have two flawed companies and you’re turning it into one mega-flawed company.”
Moderator’s Comment: Forget the negativity. If you’re advising Kmart/Sears management, what do you have them do to make the merger work as a retail business?
George Anderson – Moderator
- Kmart name to fade from 400 stores – The Detroit News
- Kmart to put Sears name on 400 stores after merger – The Associated Press/Detroit