Sears'clothing sales hit an all-time low its first quarter of 2001, making it the worst-performing category ever recorded in company history. In response, according to Lacy, Sears executives hashed out three apparel-free concepts. But the cost to revamp the stores would have been too pricey, he said, and the remaining retail categories would not produce enough revenue to make up for the loss in clothing sales.
Though still the nation's second-largest retailer, Sears has found it cannot compete with the clothing sales of such competitors as Target, J.C. Penney and Kohl's. Lacy pointed out that Sears has been unsuccessful in making its apparel stand out from that of its competitors. According to the ceo, Target is known for interpreting the hottest trends at low prices; J.C. Penney's successful Arizona house brand outperforms Sears'Canyon River Blues brand; and Kohl's has been successful with its strategy of offering fewer styles in a broad range of colors and sizes.
Lacy doesn't hide the fact that his company plans on imitating Kohl's strategy of limiting the number of in-store vendors, so customers are not overwhelmed by numerous clothing lines. Lacy is in the process of searching for merchandisers to help his management team.
In the 1950s and 60s, Sears was competitive in fashion apparel. But in focusing on its mall-based anchor-store competition, it forgot to focus on freestanding Target and Kohl's stores and small specialty stores, all of which played a part in stealing Sears'customer base. The “Softer Side of Sears” repositioning campaign of former ceo Arthur Martinez in the mid 1990s helped emphasize the non-appliance aspect of the store and temporarily boosted sales. But, says retail analyst Wayne Hood of Prudential Securities, the campaign has produced no real long-lasting effects. However, says Lacy, Sears will launch another expensive “image-building” advertising campaign in the fall.