retail

Struggling Sears Taps New Talent

Sears-Store

Just days after announcing sweeping store closings, Sears Holdings says it has named Ron Boire its new EVP/ chief merchandising officer, as well as president of both the Sears and Kmart formats.

The company hopes the executive -- who had been president and CEO of Brookstone and has also done time at Toys R Us, Best Buy and Sony -- will help it through an investor relations nightmare it is now describing as “a transformation of our business, from top to bottom, as we seek to become the leading integrated retailer in the country," CEO Lou D'Ambrosio says in the release announcing the hire. "By attracting someone with Ron's significant experience in retail, merchandising and product development as well as in leading companies through turnarounds, we're adding a key talent in accelerating our transformation."

advertisement

advertisement

At this point, Sears better accelerate in a hurry. While sales at the once-mighty Sears have been shriveling since 2005, just after Christmas the company announced that business was worse than previously expected, with same-store sales results skidding 6% at Sears and 4.4% at Kmart. The declines were driven by disappointing results in electronics, home appliances, apparel and layaway -- all areas where one might expect the lower-end department stores to do well. As a result, it says earnings will likely fall to less than half of last year’s.

In response, it says it will shutter 100 to 120 Kmart and Sears Full-line stores, slash its inventory by $300 million and cut an additional $100 to $200 millions in costs. (Anyone who has wandered through a Sears recently knows there aren’t many frills left to eliminate.)

Despite its poor retailing results, the company remains well regarded by many in the financial community because of the investing acumen of hedge fund manager Eddie Lampert, Sears’ chairman. But with its stock price spluttering, even fans are losing faith, and investors lost more than 50% on their Sears holdings last year.

In fact, it’s open season on Sears’ strategies. A Reuters report carried the headline “Memo to Eddie Lampert: Dump Kmart to save Sears,” for example. "Trimming down a hundred stores is like rearranging deck chairs on the Titanic," commented one fed-up analyst. "In a world that has Wal-Mart and Target, there is really no need for a Kmart," said another. 

Reuters says Sears -- now just the 10th-largest retailer in the U.S -- is expected to post an annual loss for the first time in 2011.

Next story loading loading..