Sears Synopsis

Synopsis: Sears

In 2004, Kmart announced the company was buying Sears Roebuck and Co, creating the third-largest retailer in the country behind Wal-Mart and Home Depot. “Sears has had a very different problem from Kmart”, said Sears Chairman Alan Lacy. “Our services and products are as good as our competitors but they are not where our customers are “This gives us the opportunity to grow off-mall locations closer to the customer “(CNN Money 2004). While each store would continue to be maintained separately; as part of Lacy’s plan, the new company, Sears Holdings planned to covert several hundred Kmarts to Sears. Founded in Detroit in 1899, as S.S. Kresge, Kmart was known for home accessories and its strong clothing sales. Sears began in 1886 as it sold watches though catalogs. However, throughout the years, the company became best known for its Craftsman tools and Kenmore appliances. For customers, the deal would be a win- win situation. “Imagine going into Kmart and buying a Sears Craftsman toolset, or buying Kmart’s Martha Stewart home products at Sears,” said Marshal Cohen, chief retail analyst with market research firm NPD Group. “To Kmart shoppers, Lands End may not mean anything, but it will now” (CNN Money 2004). Kmart Chairman Edward Lampert added, “We don’t want two separate cultures but to blend it into one great culture” “The idea is to make the stores more competitive while staying focused on the customer (CNN Money 2004).

In 2005, sixty nine percent of Kmart shareholders voted to approve the $12.3 billion dollar acquisition; however, many retired Sears employees complained and feared the department store company’s assets would be sold off to raise cash. In response, Lampert choose to focus on the company’s retail prospects, stating; it’s an opportunity to transform two companies that once were great-to transform them into a great company relative to the 21st century (USA Today 2005). Lacy added “The market in general has strongly supported the merger”, referring to the double-digit percentage gains by both companies’ stock since the announcement of the deal (USA Today 2005).

A year after the blockbuster merger, very few changes had taken place at the store level. “We remain very much a work in progress,” said Don Germano, Senior Vice President/General Manager of Kmart for the new owners at Sears Holdings Corp. “We are unmistakably one company today. But now the heavy lifting begins” (St. Petersburg Times 2006). Although Kmart stores now carried the Sears DieHard batteries and Craftsman tools, and Kenmore appliances were going to be selling in selected Kmart stores, the plan to convert several Kmart stores to Sears was halted. Unifying the headquarters of two huge bureaucracies in a suburban Chicago, was no small task given Sears’ entrenched office