The Brand Man Speaks

Sears Holdings to close 120 or more Sears and Kmart stores

It should come as no surprise to anyone who shops brick and mortar stores these days that Sears Holding the parent to Sears and Kmart is planning to close 120 or more stores around the US.

Most retail competitors did fairly well this year and particularly this holiday season. Why did Sears not enjoy the same benefits of consumers going out and spending?

Simple.

Sears has no brand identity and hasn't for many years. Yours truly has written numerous times that Sears is a retail brand dinosaur that should close up and die. The brand hasn't had a positioning of note since maybe the "softer side of Sears" over a decade or more ago that helped consumers understand they were also sellers of soft goods (apparel) besides hard goods, (tools).

Sears used to be the catch all retailer one could go to, to get anything (besides food) you needed. It was America's store. They sold virtually everything. As WalMart exploded as the mega retailer of the past decade and retailing in general became more defined and brand specific, Sears lost its way. It isn't known for good pricing, service or selection or unique goods (that are consistent with its mid-America brand--Kardashian products make absolutely NO sense at Sears but don't get me started about that emperor's new clothes business). Sears exists because of inertia not because of any reason to exist and that is why I expect the brand to be out of business within two years or less. Sears is just completely out of step with the world in which we live today. Period.

Watching out for you everyday.

Eli

 

Macys expresses uncertainty about relationship with Martha Stewart after announcement of J C Penney deal

As discussed in a previous post, Martha Stewart has been successfully able to distribute her branded goods broadly across the retail planet, however, Macys did react to the news that she had sold a percentage of her company and would be building shop in shops in J C Penney's US wide. They did not end their relationship with her but indicated they would "re-visit" their product selection under her brand.

What likely will happen is a jockeying for position. Macys will keep Stewart's products if they are distinctively exclusive to the retailer and not somehow copied for inclusion in Penney's. Further, they probably will want to readjust their financial relationship with her to a more favorable one.

Macys is a higher level retailer than Penney's and has been fairing well in the economic downturn by offering unique and meaningful brands and products to its customer base. Stewart's line of home goods has been important to Macys so just giving it up likely would not be a good idea. Macys deal with Stewart expires end of 2012. They should renew. One iffy note. Apparently according to the Wall St. Journal, Stewart's company did NOT tell Macys about the Penney's deal until just before it went public which probably caused some major ill-will.

Altough Macys noted a concern about "brand proliferation" of Martha Stewart branded goods (too much of a good thing in too many places) I believe her brand is strong enough to do well in more types of retail concerns and I also believe Macys will see this too.

Watching out for you everyday.

Eli

 

Martha Stewart partners with J. C. Penney to expand brand and help shore up weak sales at retailer

Martha Stewart proves if your brand is targeted right and the core brand essence is compelling enough it can appeal to a broad spectrum of Americans across socio-economic levels.

Stewart is partnering this time with J. C. Penney for the development of mini Martha Stewart boutiques inside the lagging retailer's stores nationwide. Penney has taken nearly a 17% stake in Martha Stewart's public company. For Penney's CEO Ron Johnson sees this co-branded venture as a way to increase the retailers exposure and importance as he tries to get the company back on its feet. Penney's is doing poorly relative to Macys and other traditional department store entities. Johnson recently took over the helm of Penney's after notable tentures at both Target and Apple where he developed the wildly successful Apple retail concept.

Stewart will provide new exclusive products for her shop in shop concept that will not directly compete with her current products sold at Macys, Home Depot and PetSmart. Staffers will be exclusive to Stewart's mini stores to ensure the brand message stays on target.

Although Stewart's empire has taken a big hit in the past few years because it is so advertising dependant (her magazine is a big part of her empire), her alliances continue to prove she has staying power and remains one of the iconic brands of the past several decades especially given her stint away from the business for illegal stock transactions followed by jail time.

Watching out for you everyday.

Eli