Sears has been trying tirelessly to revamp its business, and the retailer’s latest plan for returning to profitability is to close more stores.
Speaking at the company’s annual meeting at its Hoffman Estates, Ill. headquarters Tuesday, Sears CEO Edward Lampert, said, “You don’t need 2,000 stores to be competitive in the U.S.,” The Wall Street Journal reported.
In the past in might have been OK to continue operating less profitable stores, Lampert said, but in today’s shifting retail landscape where more shoppers are buying online and less are visiting department stores, retail locations with under par performance will need to be nixed.
The retailer has already closed close to 500 stores since 2005, and more than 300 of those were closed between 2010 and today. Lampert did not say how many more Sears stores would be shuttered, but he did say the company would announce more closures as part of its return to profitability transformation.
Many of Sears’ stores are simply too big, Lampert said, so the retailer will continue to lease space as rental income is expected to be a growing revenue stream for the future. Sears has already leased retail space to Dick’s Sporting Goods, Whole Foods and Forever 21 in an attempt to regain firm financial footing.
Lampert acknowledged the company’s lackluster performance of late, but noted the strides the company has made.
Sears has been heavily investing in its Shop Your Way loyalty program and online efforts as part of its transformation, and although nothing has yet seemed to position the retailer for success, Lampert said the lack of immediate financial improvements points to a bigger transformation underway.
Shifts at Sears have been rampant recently and aside from Shop Your Way, a social shopping community and loyalty program that lets consumers earn reward points on store or online purchases, get deals and coupons, read product reviews from like-minded shoppers and create custom wish lists for social sharing, Sears has invested in new partnerships and other omnichannel offerings.
The retailer announced a new offering last month, called Get Advice, and said it is leveraging the online and mobile channels its members currently use as way to provide advice on products and services. With Get Advice, Shop Your Way members can connect with Sears’ store associates to get information and advice about products.
In yet another move expected to streamline business processes and improve members’ experiences, the company hired former Dell executive William Hutchinson to lead its supply chain business unit.
When it comes to apparel, a department where Sears has struggled, Lampert said the company is rethinking its strategy and plans to focus on shorter inventory cycles and faster fashion going forward. Sears probably has too much floor space currently dedicated to apparel, Chicago Business reported Lampert as saying.
It’s smarter to buy $50 million of apparel 10 times throughout the year than to make a large $500 million bet a year in advance, he said. “We’re going to buy more frequently and in smaller quantities,” according to Chicago Business.
Sears added a new fast fashion shop-in-shop in stores called Now + Here earlier this year, which will be updated with monthly deliveries of the latest trends to draw more shoppers to its brick-and-mortar locations where sales are the weakest. The retailer also partnered with Seventeen magazine to launch a new fashion line in its stores.
The company announced Tuesday that it intends to release financial results for its fiscal 2014 first quarter on or about Thursday, May 22, 2014.