Sears Will Test CE/Majap Outlets

HOFFMAN ESTATES, ILL. — Sears will open the first of what could ultimately number as many as 100 freestanding CE and major appliance specialty stores next month.

The Sears Appliance & Electronics store, which will open in northwest Indiana in June, will be the first of three such new-format stores that the retailer plans to test this year. Two more units are scheduled to open in suburban Chicago in October.

The strategy, which plays up Sears' strength as the nation's No. 1 majap merchant, and leverages its explosive growth in digital CE products, was first revealed a year ago by outgoing chairman/CEO Arthur Martinez (TWICE, May 29, 2000, p. 46). His successor, Alan Lacy, announced its implementation during the company's annual shareholder meeting, held here earlier this month.

Lacy said the Brand Central stores are designed to press Sears' lead within the CE and majap categories in markets that don't necessarily warrant full-line units, explaining that "We can drop them into market voids." But the plan also underscores the under-performance of the company's full-line stores, which Lacy conceded "are not operating as they should."

The specialty stores will measure about 20,000 square feet in size, which is slightly greater than the floor space devoted to CE and majaps in Sears' full-size units. Lacy said he could foresee Sears ultimately building upward of 100 of the freestanding stores, although the plan is far from a done deal. "We won't expand without getting a read from the tests," he assured shareholders.

Lacy added that appliances continue to show "very strong growth" for the retailer and that Sears had "captured our fair share of appliance market share after Circuit City left the category last summer." He also cited digital CE products as another growth category for the company.