Recent headlines related to Sears Holdings typically center around store closures or the company’s latest financial maneuvering, which typically include cash infusions from CEO Eddie Lampert’s ESL hedge fund. Over the weekend, the company made a different sort of news.
The retail group is testing two new store formats that combine its banners in the hopes of boosting store productivity. The first features a mini Kmart inside a Sears store in Brooklyn, New York. The idea reportedly came from shoppers who were requesting everyday items at the store.
“The store focuses solely on grab-and-go items for the city shopper, including groceries and household products such as toilet paper, toothpaste, laundry detergent, cosmetics, healthcare items and more,” spokesperson Larry Costello told USA Today.
Next, the retailer is reportedly going to try adding Sears appliances to Kmart stores.
If the concepts take off, it could be a way for the struggling retailer—which has been rapidly shedding stores—to downsize its fleet further while also bolstering productivity.
The move follows the general trend that’s had retailers attempting to do more in less space.
Target, for one, has embraced smaller stores. The big-box retailer plans to open more than 100 in urban areas and college towns with the expectation of double the productivity when compared to its average-sized locations.
Kohl’s has reported success by shrinking its stores within its existing footprints with minimal impact to sales. In places where the downsizing has been most drastic—from 87,000 square feet to 35,000—the department store has become a landlord, welcoming in the Aldi department store chain. The retailer has even turned over some of its floor space to Amazon shop-in-shops in the hopes of drawing more foot traffic.
The combined Kmart/Sears locations follow the company’s attempt over the last couple of years to tinker with its typical format. The company launched its first Sears Appliance and Mattress store in Pharr, Texas in June 2017 after the success of the Sears Appliances concept, which bowed in Ft. Collins, Colorado in 2016. At the time, Sears remarked on the “overwhelmingly positive” response the appliance store received.
Meanwhile, J.C. Penney has been rapidly ramping up its home refresh and appliance offerings. The retailer’s goal has been to scoop up shoppers who would have once turned to Sears before the chain began its major contraction.
Former JCP CEO Marvin Ellison was quoted by Fortune as saying, “We’re going after Sears and we’re going after market share that we think is going to be available not only now but as they continue to contract.”