When a bankruptcy judge approved Eddie Lampert’s $5.2 billion takeover bid for Sears Holdings on February 7, it was with a suggestion to “not to be a cartoon character.”
Certainly his management style was unusual, visiting the company’s headquarters only once or twice a year. Or having interests that may be different from those of other investors, as the company noted in a 2018 public filing.
But having truly taken over the company, now he has to make it work. Future Sears and Kmart stores will be different from those in the past, according to a Wall Street Journal report.
“Our goal is to continue to shrink the size of our stores,” Lampert told the Journal.
There will be a total of 425 stores: 223 being Sears and the remaining 202 as Kmart. The target store size going forward will be about a third of the traditional floor plan.
Sears retains the Kenmore appliance and Diehard battery brands and continues to have a license to sell Craftsman tools, which the company sold to Black & Decker in 2017.
But apparel will see big cuts, which might be a problem. While Sears accounts for 12.9% of the market share, appliances—along with hardware—don’t necessarily make for frequent repeat business. And the company has major competitors in hardware, with big box chains like Home Depot and Lowe’s leading the market.
When asked about maintaining customer frequency and activity, Lampert told the Journal that the company’s Shop Your Way loyalty program “has always been our answer for how we’re going to be more relevant.” However, loyalty programs are common in retail and during a recent court hearing, a Sears executive acknowledged that the program had missed its targets so far.