Sears’ major appliance suppliers are standing fast with the ailing chain, chairman/CEO Eddie Lampert said, even as its losses continue to mount.
In a rare Chairman’s Letter blog that accompanied the company’s fourth-quarter earnings results, Lampert said the retailer continues to enjoy strong partnerships with its white-goods vendors, “despite speculation and reports to the contrary.”
To underscore the point, he indicated that Sears has negotiated contracts with all three major OEMs for its private-label Kenmore appliance line through the end of 2018, and cited last fall’s introduction of the premium Kenmore Pro kitchen suite as evidence of Sears’ continued leadership in the category.
Elsewhere in his blog, Lampert suggested that even as he closes stores, Sears may open new, smaller-format showrooms down the road.
He also bemoaned his company’s competitive disadvantage as a legacy brand, compared to newer players that have skirted sales tax (Amazon), receive government subsidies (Tesla), or can raise “almost unlimited capital” and are forgiven their early-stage losses (Uber).
But amid what he described as “tectonic shifts” in the retail sector, Sears’ “Shop Your Way” multichannel strategy is gaining traction, he said, as evidenced by the 100 percent increase in mobile’s share of online sales last year and a 46 percent rise in mobile traffic.
What’s more, his “integrated retail” initiative now encompasses 74 percent of Sears’ online transactions, meaning both digital and physical channels were involved in the order fulfillment. Examples would include a new free shipping option for in-store orders placed through a mobile app, or the ability to pick up, return or exchange an online purchase from curbside.
Lampert also promised “more aggressive actions and deeper cost cuts” to stem the company’s widening losses. Those losses grew to $580 million in the fiscal fourth quarter ended Jan. 30, from a year-ago loss of $159 million, as unseasonably warm weather impacted the apparel business and dragged down revenues nearly 10 percent to $7.3 billion.
But CE also played a role, as both Sears and Kmart transition to a connected, complete-solution selling model. Kmart’s comps fell 7.2 percent with CE and 5 percent without during Q4, while Sears’ comps declined 6.9 percent with and 4.8 percent without.
Both chains were buoyed by gains in mattresses and majaps, the company reported, and full-year losses actually narrowed, from $1.7 billion in fiscal 2014 to $1.1 billion last year.
See Sears’ infographic highlighting its accomplishments last year and goals going forward: