Summary
Lampert and his team bought an aging giant who needed a complete marketing make over. While the Lampert team did a great job in finding ways to increase cash, they did nothing to bring the customers back into the doors. The consumer has no reason to shop either the Kmart or the Sears Stores as they have done nothing to the merchandise mix, store display, and customer service. In the meantime their competition has taken away their core business and customers and will continue to do so. While Target and Wal mart will continue to destroy Kmart at the discount level, Lowes Home Depot and JC Penney will continue to take away the core Sears customer.
Analysis
Sears and Kmart are heading to the same retail cemetery as all the other past great retailers. The cemetery is full of great names such as Wards, Woolworth, Treasury Stores, White Front, Zayre, Gimbels, G C Murphy, Vornado, Kings, Service Merchandise to name a few. Woolworth at it's peak was the largest retailer in the United States and was headquartered in the tallest building in the United States at that time. Is there some similarity to Sears.
Kmart has lost it's place among the discount retailers as the consumer is being attracted to better run stores that offer better product, better prices, in stocks, cleaner stores, and better customer service. Target with their branded strategies has knocked out the Martha Stewart program while Wal mart has giving Kmart a knock out on core products with better pricing. Sam's Club, Costco, Staples, Bed Bath Beyond, and Petsmart have become category and price leaders that have given Kmart close to the final blow.
Sears has lost it's place as their is very little room in the retail world for a general merchandiser. Like the catalog showroom business, the day of the general merchandiser is over. Wards is gone and JC Penney changed itself into a top line department store. Sears never had a strong soft lines business and continue to lose this business to Kohls, Penney, Macys, and Target. Sears strength was in hardlines and Lowes and Home Depot are growing at the expense of the Sears customer. Sears has always been the giant in White Goods appliances with brands such as Kenmore. Lowers entered this category and in a few years will replace Sears as the number one supplier in this category.
If Lampert wants to be a retailer then he will have to spend the money that has been generated to put it back into the stores and not to buy back stock that will do little in the long run for the company. He needs to create and develop a new strategy for both operations and putting Sears franchise operation into Kmart Stores is like a pimple on an elephant, no one is going to notice. The company needs to reach out and find the best and most talented team of merchants and marketing people in the industry and try to bring a statement that will not only attract the customer back into the store but will start taking back market share. If not, they might as well make two more tombstones for the retail grave yard.
