Sears Outlines Expansion Plans
May 13, 2005
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Retailer Sears Holdings Corp. expects its off-mall store expansion to aid its appliance sales and market share. Following the acquisition of Sears by Kmart earlier this year, some free-standing Kmarts are being converted to Sears Essentials, which will sell the appliances and tools that Sears is known for, as well as grocery items available at Kmart. About 85 will open this year and hundreds more are planned.

"We are extremely excited about the opportunity that the Kmart merger represents," said Tina Settecase, vice president and general manager of home appliances at Sears, during a kitchen and bath industry show in Las Vegas. "Kmart doesn't carry appliances, but it provides us with an additional 1,500 stores that we can consider to put appliances in," Ms. Settecase told Reuters.

In the new stores, which are opening in California and East Coast U.S. states, such as New Jersey and Florida, the space devoted to appliances will vary. "We will look at the number of households in the market and the demographic profile of the people who live in an area and we will tailor the assortment to that," Ms. Settecase said.

Sears has a 37 percent appliance market share overall, but lost a little in the first quarter. "Part of what we feel is the issue is we are out-stored," Ms. Settecase said, noting that retail rivals, such as Home Depot Inc., Lowe's Cos Inc., and Best Buy Co. Inc. have expanded in recent years, while Sears has not.

Appliance suppliers expect the Sears expansion to help their business. "For years, Sears had not added new doors to their franchise," said David Swift, Whirlpool Corp.'s executive vice president for North America. "For us that created challenges."

She also said that, while Sears talks regularly with appliance makers, including newer U.S. entrants such as South Korea's LG Electronics Inc., the retailer carries the top six brands as measured by market share, including its own Kenmore brand.

"The question comes up regarding some of the newer Asian brands and we are talking to them and always considering them," Ms. Settecase said. But a relatively small portion of customers ask for those newer entrants. "You can never have everything that's out there," Ms. Settecase said. "We are confident that we can satisfy more customers with the brands that we carry than any other retailer." (Reuters)

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