Sears Adding Major Appliances To Most Hardware Stores

HOFFMAN ESTATES, ILL.— Pleased with the trial performance of white goods within select Sears Hardware stores, the company now plans to add majaps throughout most of the freestanding, 163-unit specialty chain, which it has renamed Sears Appliance and Hardware.

The company, which currently operates 60 appliance and hardware outlets, began the final rollout last month with the introduction of refrigerators, washers, dryers, dishwashers, ranges and microwave ovens into 35 additional hardware stores in the Boston, Cleveland, Indianapolis, Pittsburgh, St. Louis, Toledo, Ohio, and Washington markets.

Sears plans to add appliances to most of its remaining 103 hardware stores by year's end.

Sears began the pilot program last March in Batavia, Ill., and extended it to stores in suburban Cincinnati, Cleveland, Detroit, Houston and Long Island, N.Y., last June as part of a four-month test of the concept. (See TWICE, June 23, 2003, p. 40.)

The move, which the company described as a "significant growth strategy," is part of an aggressive, overarching plan to reassert Sears' white goods hegemony and re-claim market share lost ostensibly to the home improvement channel by re-assorting and redesigning its appliance departments.

Unlike Sears' full-line stores, which analysts contend are disadvantaged by their mostly indoor mall locations, the hardware stores are largely situated in strip-type shopping centers, which are now favored by consumers for their convenience and easy access.

"This format extends our appliance offering in a convenient new way, right in our customers' neighborhoods," said Beryl Buley, Sears' senior VP/general manager for home stores. "This is a continuation of the significant changes Sears is making to maintain and grow our appliance business and better serve our customers."

He noted that the pilot stores exceeded Sears' expectations, and that the addition of white goods to the hardware stores has helped the company generate more appliance market share per store than its competitors, a key metric.

The stores, which Sears built in 20,000-square-foot and 55,000-square-foot formats, carry the same expanded, 260-model majap assortment as the full-line locations — including 50 cash-and-carry SKUs to counter Lowe's' and Home Depot's advantage in take-with sales. The hardware stores also merchandise products by brand in Sears' new good-better-best floor layout, and both channels are offering an expanded selection of opening- price-point appliances to help restore Sears' image as a value destination.

To make room for the majaps, the hardware stores eliminated more than 10,000 SKUs in slower-moving categories, including cabinet and bath hardware, ceiling fans, lighting and select electrical and plumbing supplies. The stores have also removed all "top stock" inventory and over-the-aisle signage in order to improve sight lines and lighting, and have expanded their displays of outdoor grills.

Besides selling appliances, the new Appliance and Hardware stores will continue to specialize in paint, tools and lawn and garden products.

Sears had previously experimented with a freestanding majap and CE-only specialty store concept called Sears Appliances & Electronics, but is not actively pursuing that format.