By  on February 28, 2006

NEW YORK — Sears Holdings has decided to simplify its complicated retail portfolio by phasing out the year-old Sears Essentials name but retooling the off-the-mall format.

The name will be replaced by the retailer's other off-mall concept called Sears Grand, launched in September 2003, and the stores will be revamped in an attempt to make them easier to navigate with shop-in-shops and include new flooring, fixturing and signs, according to Sears.

Fourteen Kmarts slated to be reopened as Sears Essentials in May will be called Sears Grand and will feature a new interior and exterior. The existing 50 Sears Essentials are expected to be revamped and renamed subsequently.

"Once the 14 stores are opened, we will revisit existing Sears Essential stores and make most, if not all, the improvements and at that point they will be rebadged Sears Grand," said a spokesman. "Basically, the name change is the very smallest point. The bigger point is that the format has been retooled." None of the off-mall stores are closing, he said.

Generally, Sears Grand units, averaging around 200,000 square feet, are larger than Sears Essentials, at roughly 100,000 square feet. Traditional Sears stores in malls range from 100,000 square feet to more than 400,000 square feet at a unit in Livonia, Mich., but most are around 200,000 square feet.

Sears Grand and Sears Essentials were getting increasingly similar in their merchandising, selling the core Sears assortment of hard and soft goods, but with Sears Essentials selling a more edited assortment given its smaller footprint. Both chains also sell much of Kmart's convenience offerings, but not Kmart's proprietary labels such as Martha Stewart or Jaclyn Smith. They also both have racetrack layouts, wider aisles than traditional Sears stores and a focus on impulse items.

Sears' off-mall strategy is a growth vehicle to compete against Wal-Mart, Kohl's and Target and an alternative to malls where Sears has little room left for growth. In September, Julie Younglove-Webb became senior vice president and general manager of Sears Essentials and Sears Grand, raising speculation the two chains had synergies and could be combined. She was vice president of space planning for Kmart stores, where she directed store refurbishment, while supporting the Sears Essentials rollout. Around that time, a Sears Securities and Exchange Commission filing indicated that 400 Kmarts could convert to Sears Essentials in the next two or three years.The decision to drop Sears Essentials seems like a setback for Sears, considering the concept was once touted as the most aggressive growth initiative in the company's history. Sears Holdings operates 870 full-line, 1,100 specialty stores,,, specialty catalogues, owns 53.8 percent of Sears Canada and is trying to take over the remaining outstanding shares. While exploring the new off-the-mall format, Sears still struggles with its core department stores in the malls.

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