Sears Opens 2 CE/Majap Specialty Units

Bolingbrook, Ill. — Sears opened its second and third CE and majap specialty stores last month near Chicago.

The new-format stores, plans for which were first announced in May, join an existing unit that debuted in Indiana in July.

The prototypes, called simply Sears Appliances & Electronics, were developed to play up Sears' strength as the nation's No. 1 majap merchant and to leverage its explosive growth in digital CE products.

They also provide shoppers with an off-mall alternative to Sears' larger full-line stores.

The test formats, located in the Chicago suburbs of Mt. Prospect and Bolingbrook, Ill., offer the same mix of products found within the CE and majap departments of its largest stores, albeit in easy-access strip center locations. At 20,000 square feet, their floor space is slightly greater than the total area devoted to CE and majaps in Sears' full-size units.

"Our appliance customer tells us that she wants more shopping convenience, so we're testing this format as a way to grow these categories by presenting them in off-mall, neighborhood locations," said Sears' hardlines president Lyle Heideman.

Sears has no immediate plans to open additional units, a spokesman said, although in announcing the concept last spring, chairman/CEO Alan Lacy suggested that the company could ultimately open as many as 100 of the freestanding specialty stores. For the time being, however, Sears will study and tinker with its trio of test units, which are easily accessible from its headquarters in Hoffman Estates, Ill.

"We'll be testing every aspect of the stores and making adjustments as we receive feedback from customers," Heideman said. The company added that the Bolingbrook and Mt. Prospect locations where chosen for their "strong demographics" and the availability of "top-grade" retail locations.

On the CE side, the prototypes' merchandise mix includes:

• TVs from Hitachi, JVC, Mitsubishi, Panasonic, Philips, RCA, Samsung, Sony and Toshiba;
• DVD players from JVC, Panasonic, Samsung, Sony and Toshiba;
• Camcorders from JVC, Panasonic, Samsung, Sharp and Sony;
• Digital cameras from Fuji, Hewlett-Packard, Olympus, Panasonic and Sony;
• Computers and accessories from Compaq, Hewlett-Packard and Sony.

In addition, the stores focus attention on digital products with an array of "digital solutions for the home" displays, which highlight home theater and home audio; digital imaging; PDAs; digital cameras; digital camcorders; personal audio and wireless communications; and mobile audio.

During their grand opening weekend last month, the two newest stores also held demonstrations of HDTV by Mitsubishi, Hitachi and Sony; home audio by Bose; digital imaging by Sony; MP3 by Samsung; and PCs by Compaq. The stores also offered zero-percent financing for one year on TVs and camcorders more than $499.

In appliances, the top six national brands — Amana, Frigidaire/Electrolux, GE, Maytag and Whirlpool — will be represented along with Sears' private label Kenmore and Kenmore Elite lines. The stores also feature four new kitchen vignettes that present products in a realistic setting to help consumers envision the appliances in their own homes, as well as a new self-serve vacuum cleaner department stocked with Eureka, Hoover and Kenmore-branded merchandise.

Opening weekend majap promotions included zero-percent financing for one year and free delivery for purchases over $399.

Sears' specialty store strategy was developed by former chairman/CEO Arthur Martinez in May 2000. In announcing its implementation last spring, his successor, Lacy, explained that the freestanding format was developed to press Sears' lead within the CE and majap categories in markets that don't necessarily warrant full-line stores. "We can drop them into market voids," he said at the time.

But the plan also underscores the under-performance of the company's full-line stores, which Lacy conceded "are not operating as they should." Those problems have been addressed in the company's new three-year strategic plan, which calls for draconian cost cuts, beefed up majap and CE selections, and a discount store demeanor (see story, right).