Craftsman brand name sold by Sears

[sailor55330]

It's interesting to read the speculation here from a consumer standpoint. I relate to SHC (Sears holding company--the corporatoin that owns Kmart and Sears) from a different standpoint. I deal with them as a vendor, meaning my company sells products. I agree that it's its a shame to see one of the last originators of the department store (Kmart was the first modern discount department store chain-BTW) continue to plummet. But let me tell you what is going on here. The CEO of SHC, Eddie Lampert is making a ton of money. He is very very good at that. The rumor on the street was that when he bought Kmart, he paid about $850MM. He immediately divested all of the bad stores and sold the properties, which were worth far more than the business. After all of the transactions were finished, it's estimated (and I'm sure it could be verified somewhere) that he bought SHC for a net of less than $20MM. Not a bad deal at all. It appears to me that he has found a way to pull off another deal. At $900MM on a brand that has paid for itself many times over, SHC is simply exploiting the opportunity to pad the bank. It was never about losing the quality tool image or providing great customer service in recent years, it's all about profit. Sad to say, but they never really kept up with the competition in terms of innovation and sourcing as well as shopping experience.

Unfortunately, the writing is on the wall for SHC, it's just a matter of when, not if.

[capncarl]

It is alarming when you hear of the corporate raiders sacking a business. There is a special place on the bus for them, under the tires.

[woodturner]

Unfortunately, the writing is on the wall for SHC, it's just a matter of when, not if.

I'm not convinced, I think Lampert is more clever than many give him credit for.

The analysts that think SHC will fail are looking at the B&M stores and "looking back". The analysts that think they will thrive are looking forward. I do think the Sears B&M stores will mostly disappear, but the online business and pickup kiosk model will thrive.

They are clearly looking at some very innovative ways to compete with Amazon, in ways that Amazon can't match. Have been involved in some focus groups regarding this, and was pretty impressed with their plans. Unfortunately I had to sign an NDA, so can't share any details.

SHC realizes they made a major mistake by allowing Amazon to "eat their lunch". They are quietly working to regain their dominance, and I suspect will achieve that goal and likely put Amazon out of business, it's more a question of when. Amazon is likely to be blindsided when it happens.

[sailor55330]

Woodturner, I totally agree that Lampert is pretty shrewd, but to say that Sears/Kmart will be the downfall of Amazon is a pretty bold statement/objective. Amazon certainly needs someone to compete with them, but SHC would have been my last thought. The company may reinvent themselves, but honestly, Amazon is light years ahead of anyone else in terms of business models and are no where near the potential they want to be at. I can promise you the way Amazon looks at the business and partners with the vendor community vs the way anyone else does, especially SHC does is absolutely night and day. If companies like Walmart, who actually has a great dot-com business are concerned enough about Amazon to the point of buying their own dot-com entity (Jet.com) and still can't truly compete, then it seems highly unlikely that an entity like SHC would be able to do what no other has. I truly hope they succeed, but having sat in on corporate strategy summits for many of the competitors, IMHO, SHC is riding a bicycle when many others are flying jets. Also having participated in conducting multiple focus groups, please remember that what is presented are usually just concepts and very few make it to the light of day. Competition is healthy and more of it is needed.

[LCHIEN]

I agree with Sailor55330, Amazon concentrates solely on the internet sales channel and not on any B&M stores. They are **** bent to maximize features for the internet web page customers. Lists, reviews, links etc.an features.

Companies like sears have to put so much effor into their B&M stores which I imagine still bring in a large portion of the profits... they simply can't focus like the laser that is Amazon.
For them to compete they need to close the stores and open the distribution channel and bring innovation to websites. They will lose their customer base because the ones who use B&M stores are not the one dialing into Amazon.It will take them a long time to get the loyalty with new customers that Amazon already has.

[LinuxRandal]

I agree with Sailor55330, Amazon concentrates solely on the internet sales channel and not on any B&M stores. They are **** bent to maximize features for the internet web page customers. Lists, reviews, links etc.an features.

Companies like sears have to put so much effor into their B&M stores which I imagine still bring in a large portion of the profits... they simply can't focus like the laser that is Amazon.
For them to compete they need to close the stores and open the distribution channel and bring innovation to websites.

Not really sure that closing the stores is the right way to go about it. I view "right sizing" as more appropriate. When I was born, we had a HUGE (national center) Sears outlet warehouse, a small appliance Sears store where you also bought parts, and a local Sears store that when they opened the mall stores that they were known for, the older store would have fit in two departments. There are departments that when I have been forced to go to the mall, I don't see people in. I think right sized, would be about half the store they have now. This still keeps their distribution, pick up in store channel open.
The website does need improvement, as the third party sellers, seem to even appear at times in the search Sears only section. I don't know if that means that Sears then delivers that stuff to their stores (if that was clear, that would be a benefit)
Even though I am not a Sears clothes shopper, I am like a lot of my generation and prefer to see if clothes fit, etc. then order them online. I expect that may eventually change with 3d printing and abilities to scan things. I wanted work jeans some years back and that was the last time I looked for clothes via Sears (looking for toughskin's as I remember them as very indestructible).
But I see B&M stores in general have changed. Less shopping in them, for multiple reasons. Sears outlets as I knew them are long gone. The stores, I could almost see becoming basically warehouses, with a small store and pickup location inside.