Shares of Sears Holdings Corp. continued their decline Tuesday, posting their fifth consecutive day of losses, even as U.S. equity markets rose and in spite of the news that the firm named a new chief merchant.
This story first appeared in the January 4, 2012 issue of WWD. Subscribe Today.
Sears stock closed at $31.43, down 35 cents, or 1.1 percent, in trading on the New York Stock Exchange. Separately, the company announced Brookstone president and chief executive officer Ron Boire as its new head of merchandising.
Boire will head merchandising for the Sears and Kmart nameplates. His official title at Sears Holdings is executive vice president, chief merchandising officer and president, Sears and Kmart formats. It’s a new position at Sears Holdings, according to a spokesman. One of Boire’s responsibilities will be to integrate the firm’s Shop Your Way Rewards members’ “experiences across its stores, online, service and mobile capabilities.”
“We are in the midst of a transformation of our business, from top to bottom,” said Lou D’Ambrosio, ceo of Sears Holdings. D’Ambrosio noted that adding key talent such as Boire will accelerate the company’s transformation.
The latest announcement comes a week after Sears Holdings said it would close between 100 and 120 Kmart and Sears full-line stores following a lackluster holiday selling season. Sears Holdings has already decided on 79 of the store sites to be shuttered.
Boire said, “I understand the company’s challenges, but I am more persuaded by the company’s opportunities and strengths.”
Before his stint at Brookstone, Boire was president of U.S. Toys for North America at Toys ‘R’ Us. His resignation at Brookstone became effective today. Prior to joining Toys ‘R’ Us, Boire was executive vice president, global merchandise manager for Best Buy Co. Inc., responsible for global technology and vendor management, global sourcing and private label development.
His experience at Best Buy and Brookstone already has led to some speculation in the marketplace that Sears’ strategy could focus more toward a bigger push in electronics and gadgets to reverse the trend in same-store sales declines.
That’s not far-fetched given that Sears said last week, when it announced the store closings plan, that “Kmart’s quarter-to-date comparable-store sales decline reflects decreases in the consumer electronics and apparel categories and lower layaway sales.” At Sears’ domestic stores, the “quarter-to-date decline was primarily driven by the consumer electronics and home appliance categories, with more than half of the decline in Sears domestic occurring in consumer electronics.” In contrast, apparel sales at Sears’ domestic stores were flat, while sales at Lands’ End in Sears stores were up midsingle digits.
While Boire is leading the merchandising and store format turnaround charge at Sears, John Goodman continues as executive vice president of apparel and home at the Sears Holdings design office in San Francisco. According to a Sears spokesman, Goodman does not report to Boire, but continues to report to the “board of directors of his business unit.”
The structure at Sears Holdings has the presidents of its business units reporting to the firm’s board.
In addition, Lana Cain Krauter, senior vice president and president of Sears Apparel, continues in that role. She reports to Goodman.
Meanwhile, the bulls roared out of the gate on Wall Street. The S&P Retail Index, a measure of U.S. retail stocks, rose 0.8 percent, or 4.48 points, to 527.68 as trading settled and the Dow Jones Industrial Average gained 1.5 percent, or 179.90 points, to 12,397.46.
Retail stocks rose just 2.9 percent last year as the Dow advanced 5.5 percent. The gainers included Saks Inc., up 4.3 percent to $10.17; Quiksilver Inc., 3.3 percent to $3.73; American Eagle Outfitters Inc., 2.8 percent to $15.72; VF Corp., 2.1 percent to $129.67; Guess Inc., 2 percent to $30.40, and The Warnaco Group Inc., 1.8 percent to $50.94.
Markets were fueled by a report from the Institute for Supply Chain Management showing continued growth in the manufacturing sector last month. The group’s U.S. manufacturing index rose to 53.9 last month from 52.7 in November. A reading over 50 indicates expansion in the sector.