The Plan to Resscue Sears

Topics: Sears Holdings Corporation, Kmart, Edward Lampert Pages: 5 (1753 words) Published: March 26, 2013
The Plan to Rescue Sears
Edward Lampert purchased Kmart in 2003 and Sears, Roebuck& Company in 2004 when they were almost bankrupt. Sears holdings have been operating both Sears and Kmart stores since 2004. According to factSet, sears holdings had cash and short-term investments of about 2.09 billion dollars since its creation until January 2011. In mid-January 2011, a report by national retail federation stated that the sales of Kmart dropped by 4.4%, and this placed Sear Holding at a state of bankruptcy (Bustillo, 1). In February 2011, Lou D’ Ambrosio became the chief executive of Sears Holdings. His appointment as chief executive was a result of his background in technology (Bustillo, 1). This is because he was a former executive at IBM and Avaya. Edward Lampert, chair of Sears Holdings stated that their main aim was to find a leader with experience on information and technology. To many, problems at the company had to do with poor customer services and poor retailing skills rather than technology. PROBLEMS

The sales of electronics and clothing lines of Sears and Kmart dropped due to stiff competition from Wal-mart. Wal-mart developed a program that would allow low-income shoppers to purchase goods and pay for them on an installment basis. Sears and Kmart focused only on their immediate customers rather than their future. They did not anticipate getting more customers that would help them keep up with levels of competition (Bustillo, 2). Sears holding announced that they would close down 100 to 120 stores due to poor sales in the holiday season. They also had a problem with rebranding their products. Neither sears nor Kmart kept their promises. Customers were unhappy since they walked in to the stores and found the same old-fashioned items in the stores. Sears shares went down by 27% closing the day at $33.38 in February 2011. Customers totally deserted sears because they felt that the shopping environment was poor ( Aristotle, 1). ALTERNATIVE SOLUTIONS

Lou’s plan was to combine technology and loyalty reward programs to come up with a solution to the retail issues. Employees had constant online reviews of whether their customers acknowledged with what was in stock. They came up with banners that read ‘Shop Your Way Rewards’. This was to advertise the loyalty program. The customers received promises of substantial discounts on their purchase for as long as they were willing to disclose their shopping data to the company. Shoppers with Smartphones, who stepped in the malls, would be greeted by sears workers through global positioning systems in their devices (Reynolds, 30). RECOMMENDATION STRATEGIES

Analysis by retail experts showed that the loyalty-reward program was promising but not sufficient (Aristotle, 1). They felt that, for the program to be effective, it had to consider what the customers wanted. Although the program could not correct the problem sears holdings faced, it could change the situation. Paul Swinand suggested that what sears needed was to go back to retail 101. He said that their plan of seeking customers email addresses was so slow unlike seeking new customers. Sears holdings needed to apply the SWOT analysis technique if they needed a come back. Their strengths include; maintain a good reputation of their products and provide excellent services to their customers. On the other hand, some of their weaknesses were they had many soft retail lines and stores located in malls. The opportunities were to have significant retailing programs and prosperity of the baby boomers. Their threats were competitive firms like Wal-Mart and Target, improvement of home stores and financial constraints. The SWOT analysis according to (Gregory, 39) was the best method to solve sear holdings problems. The company should also restructure the management team to ensure that all employees work towards a common goal. TRACKING METRICS

Sears holdings could find methods that would evaluate their performance....
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