Continuing to open more stores away from malls, Sears, Roebuck and Co. said Tuesday that it has named its new midsize format Sears Essentials.
The first batch of new stores, scheduled to start opening in April, will come from 25 of the 56 stores Sears bought from Kmart Holding Corp. and Wal-Mart Stores Inc. in 2004.
Hoffman Estates-based Sears has been staking much of its future away from its usual milieu of shopping malls. After acquiring the stores last summer, Sears agreed to merge with Kmart in a deal expected to close next month.
Sears Essentials will be smaller versions of the company’s 2-year-old Sears Grand stores. Those sell traditional Sears products, such as appliances, tools and electronics, but also everyday necessities, including pet supplies, soft drinks and paper goods–lines that are more Kmart’s forte.
The merger is expected to enable Sears to better throw around its weight with suppliers of such staples.
“Sears Essentials will lead the way as we embark on the most aggressive growth initiative in company history,” said Sears Chief Executive Alan Lacy.
Three of the 25 stores, which average 90,000 to 100,000 square feet, are in Illinois. The local stores, currently operating as Kmart outlets, are in Crestwood, Palatine and Willowbrook. They will remain open during the conversion.
After the merger, hundreds of Kmarts are to be converted to Sears stores. Sears spokeswoman Corinne Gudovic said they will be named Sears Essentials if they are the right size.
“Sears Essentials will be the midsize format, and most of Kmart’s stores are in the range of Sears Essentials,” she said. “We’re definitely looking to open more Sears Essentials this year and next but don’t have the exact timing and locations.”
Many of the 25 stores are in the South or Sun Belt states.
“Some of the locations tend to be fast-growing areas, in solid middle-class or aspiring-to-be-upper-middle-class,” said Craig Johnson, president of consulting firm Customer Growth Partners. “That’s where the new Sears ought to be.”
As for the name, Johnson said, “It’s not a great name, but it’s OK. It’s an honest name.”
Sears settled on Essentials after conducting research and holding focus groups.
George Rosenbaum, chairman of Chicago market research firm Leo J. Shapiro & Associates, likes the Sears Grand concept but isn’t bowled over by the name of its smaller brethren.
“Sears Essentials seems to celebrate the idea of getting less from Sears. Moreover, I think it might be confusing, because essentials are often thought of as personal items,” he said.
While the name ultimately will make little difference to shoppers, it seems to be “counterintuitive,” even as its goal is to increase the frequency of visits, Rosenbaum said.
Another consultant likes the name.
“If it says to a consumer, `Here’s easier access to more convenient merchandise,’ I think it’s a terrific name,” said Daryl Travis, CEO of Brandtrust in Chicago.
The first of the rebranded Kmart and Wal-Mart stores opened recently in Pekin, Ill. Sears is considering changing the name of that former Wal-Mart to Sears Essentials, though it has fewer convenience items than others will carry.
At the Pekin store, as well as at Sears Grand, 80 percent to 85 percent of the goods mirror what’s in a Sears mall store. Sears said it couldn’t be more specific on the expected breakdown at future Sears Essentials, but they will carry more staples.
Conspicuously missing from Sears’ announcement was whether Sears Essentials would carry the Lands’ End line. That’ll be decided on a store-by-store basis, Sears said later.
Like many Kmart stores, Sears Essentials will have pharmacies. Kmart “has far better skills in certain merchandise categories than we have,” Lacy said in November. “We have four stores with consumables and health and beauty aids, and we’re trying to figure out how to run a pharmacy. Kmart has a long-standing skill set in those categories.”
One observer wondered why Sears, whose sales have fallen for years, needed a new format.
“Make Sears work, then worry about another format,” said George Whalin, CEO of Retail Management Consultants.
