NEW YORK — Sears is expecting big things for Father's Day
Last week the Chicago-based retailer unveiled its new marketing campaign—Sears, Where It Begins—that will be used in television commercials, print circulars, in-store marketing and on the Web site.
The campaign kicked off on May 6 and will continue throughout the spring. The initial television spots were concentrated on Mother's Day, but dad will get his time in the spotlight next month.
Following a press conference in New York City to showcase the new ads, Maureen McGuire, chief marketing officer of Sears Holdings, said, "Father's Day is big at Sears with our tools, men's apparel, electronics, and lawn and garden. It's a great opportunity to celebrate our complete assortment.
David Polston, vice-president of brand development for Sears Marketing, said the company has been successful with its Craftsman apparel and work boots, "and we're putting more emphasis on that part of the business. There's only upside potential there because there's no other big brand in the workwear space. So we're excited about developing that program."
Lands' End is also "doing well," he said, noting that the company is rolling out a new shop concept. "There are 100 now but there will be 200 by the end of the year. And we're testing a mega-shop concept in Paramus, N.J. The shop is going from 12,000 to 18,000 square feet."
Polston also said that for Father's Day the store will test "gift concierges" within the tool department that can help "guide mom into the right product. We think this will be a real differentiator for us."
The new marketing campaign, created by Y&R Chicago, uses the visual image of a book and harkens back to the days when the Sears catalog was king. "We're not bringing the Sears catalog back like it was—times have changed," McGuire said, "but we want customers to remember the endless possibilities that the catalog gave them.
The spots will run on network, cable and syndicated television including American Idol, Extreme Makeover: Home Edition, Desperate Housewives and The King of Queens.
The showing by Sears—which will be followed by a similar marketing campaign unveiling by its sister company, Kmart, tonight—represents a bit of a departure for the retailer. Since billionaire investment banker Edward Lampert combined the two companies two years ago, details about its business strategy have been few and far between
Lampert rarely speaks publicly about the business with the exception of the annual shareholder meeting and the chairman's letter in the annual report. This year, Lampert said the $3.2 billion company faced several challenges and successes.
Lawn and garden, as well as home fashions, failed to perform up to expectations last year, he said, and "we have not found the right formula for Sears Grand as an off-mall offering for Sears. We remain convinced that this represents a big opportunity for Sears Holdings, and we continue to work at identifying the right formula for success off-mall."
In contrast, Lampert wrote that Lands' End "had a record year in profitability in its traditional business (i.e., catalog, online and inlet stores)," as well as "a significant improvement in the profit performance" of the merchandise within the Sears stores.
The overall apparel business at both Sears and Kmart also "showed continued improvement" last year, he said. "Kmart is further along in partnering with our sourcing and design groups, and we believe that we have improved our offering for our customers with higher-quality, better fit and appropriate fashion at great value," he wrote. "Sears apparel has turned around the decline that occurred in 2005 when it moved away from the styles our customers wanted to buy. The team has made significant progress this year and is focused on creating the kind of breakthrough improvement that would return Sears to its previous levels of profitability in this area."
Lampert said the Kmart stores are "showing signs of being more stable overall," with comps in fiscal 2006 down 0.6 percent, after a decline of 1.2 percent in 2005.
He pointed several times throughout his letter to the success of J.C. Penney. "Benchmarking ourselves against the best illuminates the clearest opportunities for improvement," he said, noting that Penney's goal for EBIT margins by 2009 are 9 percent to 9.5 percent. Sears Holdings' number is 6.9 percent, "the second-lowest margins among the top 10" retailers, he said. "We also lag many of our competitors on a sales and profit-per-square-foot basis. Narrowing these gaps in margins and space productivity represents a significant value-creation opportunity for Sears Holdings shareholders."
For the year, net income at Sears rose to $1.5 billion from $858 million last year. Earnings per share were $9.57 versus $5.59 last year.
Tonight's Kmart campaign, which will be celebrated with an event at Blue Fin restaurant, will revive the famed Blue Light Special using a talking blue lightbulb, called Mr. Blue Light, and advising shoppers to "turn on" to something new, according to the Chicago Tribune.
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