Summary
Sears is very late to the party. Urban fashion has been dead nearly three years in most urban retail centers. Fashion has shifted from "urban" to "street" in the last year or so. Urban retail is not about hip hop, as much as, it's about price value. What Sears should be considering private label and private label strategy. Direct to retail new the new model.
Analysis
Sears obviously has not gotten the word on the street. Urban fashion and music has moved into it's next phase, which is being dubbed "street". Street fashion trends have their roots in music and urban culture, but more inclusive of suburban experience and lifestyle, like beachwear, skate parks, extreme sports. Sean John, Rocawear, Phat Farm, FUBU haven't been popular for some time now. LL Cool J at 40, he's no trendsetter for 13 year olds.
Sears does not need to get on trend, as much as, they need to get back to the fundamentals, increasing margin basis points and margin dollars. Through a concerted effort to differentiate themselves via private label and private brands they should see significant increases in margin dollars. Sears should look very closely at reducing the number of vendors they currently offer shelf space and aggressively go after a good-better-best strategy which is at least 20% private labels(good) and private brands(better). They have a prime opportunity to engage Li & Fung, one of the hottest ODM's in Asia. Sears is already engaged in a licensing arrangement with Cannon via Iconix Brands. Note to Sears, Iconix also licenses sportswear, children's wear, footwear, outerwear, handbags, loungewear, headwear, jewelry, sunglasses, and big & tall.
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
