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Sears Details CE Strategy

Hoffman Estates, Ill. — As part of its drive to restore profitability, Sears Holdings has targeted its CE business for a major overhaul.

In an earnings presentation that was released today in concert with its fourth-quarter results, Sears said its CE initiatives are “focused on building partnerships to increase margin and mitigate risk.” To that end, the company is adding new CE categories and brands through vendor partners while creating a dedicated in-store presence for goods from its website’s third-party Marketplace sellers.

Plans also call for vendor-funded in-store shops featuring key brands, while the store-in-stores are being remerchandised to “maximize the exposure and presence” of its most relevant brands, Sears said.

In addition, the company said it is building new “scan-based trading relationships” to expand its assortment while mitigating risk.

More broadly, the retailer is remerchandising CE around a connected-home strategy under recently named connected solutions and CE president Ryan Ciovacco, and is opening hundreds of Connected Solutions shops to support it.

In an open letter to investors, chairman/CEO Edward Lampert acknowledged that Sears has experienced “significant losses” in CE since 2010, and said sales may “dampen” during the transition, although the new approach should also reduce the risk of material profit declines.

The strategy supports a renewed focus on restoring profitability, which takes precedence over revenues, market share “and other metrics which relate to but don’t necessarily drive profit,” Lampert said.

On the appliance side, which Sears considers one of its “best and most important” categories, the company is reinforcing its position as one of the leading U.S. majap retailers; will launch innovative products with exclusive features under the private-label Kenmore brand; and is expanding its white-goods assortment both in-store and online.

Sears describes itself as the nation’s No. 1 appliance retailer, but according to TWICE’s Top 100 Major Appliance Retailers Report, it ceded the top spot to Lowe’s following the spinoff of its Hometown and Outlet Stores business in 2012.