Sears financial performance over a number of years now suggests that the chain might simply not get it when it comes to what it takes to getting its stores turned around.
One area where the company apparently has a clue is its online business, which has quietly begun to increase sales while expanding its selection à la Amazon.com to begin including music, movies, software, video games and books.
According to a Chicago Tribune article, Sears (Sears, Kmart and Lands' End) was the second fastest growing company online among retailers serving the mass market since in 2007. Only Costco is growing faster, according to Nielsen Online.
Sears, which grew to become a retail giant through its mail order catalog business, appears to be going back to the future with the 21st century's equivalent - the internet.
"If you think about what the Big Book originally tried to do, it was to open up all this stuff to people living in the cabins in the Plains, and that's essentially what they're doing," Bill Bass, who ran Sears' online operations up until 2005, told the Trib. "When you think about the power of the Internet, that's what it's really good at."
Jonathan Salem Baskin, president of Baskin Associates, believes that Sears has a tremendous potential to grow through its online business.
"Talk about a rich heritage," said Mr. Baskin. "Like anything, it would take some commitment. Why couldn't Sears bring the world to me?"
"Strategically, in the long run, Sears has to find a reason to exist," Love Goel, chairman and CEO of Growth Ventures Group, told the Trib. "They have a significant direct-to-consumer heritage. It is probably one of their strongest assets and the only silver lining in their business."
Sears's web business is proving successful both in traffic numbers and sales revenues. The number of unique visitors to Sears.com and Kmart.com was up 20 percent in February compared to the same month a year earlier. Sears.com's traffic was up 28 percent as 12.3 visitors came to the site.
Discussion Questions: Will Sears' online business be its saving grace? Considering the low overhead and higher profit nature of the online business versus individual store operations, do you expect the company to begin divesting store assets to focus more on its e-commerce efforts? What do you see as the proper mix among sales channels for Sears Holdings' properties?