Sears Holdings Corp. isn’t letting things like steep sales declines, falling comparable-store sales and lots of red ink get in the way of its apparel expansion, one of three key areas identified by chairman and chief executive officer Edward S. Lampert as opportunities.
The retailer, which widened its adjusted loss in the recent first quarter but was able to beat Wall Street’s consensus estimates for both the loss per diluted share and revenues for the period, continues to launch new brands. Regatta Great Outdoors, Britain’s largest outdoor and leisure clothing company, bows Tuesday and will be featured in 1,800-square-foot shops-in-shops at 11 Sears units in New England.
“Sears Holdings will continue to keep searching for trends in the market,” said David Pastrana, president of Sears Apparel. “Our members’ tastes change quickly, so we’re always looking for partners that can help us keep our assortment fresh. Regatta is very successful in the U.K. and rapidly expanding to other European countries. Partnering with Regatta is great opportunity that represents quality and value.”
Sears will initially focus on outerwear, performance apparel and activewear for men and women. The brand, which was launched in 1981, also offers kids in sizes 2 to 10; footwear, including hiking boots, walking sandals and Wellies; accessories; backpacks, and equipment. Regatta is sold in multibrand stores in the U.K.
“We plan to offer Regatta in more stores and sell it online in the fall,” said Pastrana. “I think it could be big. We like to go step by step. Based on the success and recognition it’s gotten in Europe, we’re excited about it.”
Prices for Regatta at Sears range from $30 to $40, Pastrana said, adding that the brand is exclusive to the retailer.
“We chose Sears for our American debut because its customers align well to the type of enthusiasts who’ve fallen in love with the Regatta brand in Britain and across Europe,” said Keith Black, chief executive officer of Regatta Great Outdoors. “With its seasonality, vast outdoor adventure and leisure options, New England is the perfect region to introduce the brand.”
“We think there could be an opportunity to expand the range to other sizes and categories,” Pastrana said. “We [initially] want to focus on the core businesses they dominate. We’re open to new categories, new sizes and new approaches within the brand. We want to make sure we’re growing the business in a healthy and profitable way.”
Pastrana said additional markets will be added if consumer reaction is positive. “We’ll try to combine our Shop Your Way platform, which allows us to contact members [directly] and leverage our capabilities,” he said. “A big part of our base likes this lifestyle. This will have broad appeal. It’s a nice match.”
For the three months ended April 29, Sears posted net income of $244 million, or $2.28 a diluted share, versus a net loss of $471 million, or $4.41, a year ago. Adjusted for certain items, Sears posted a net loss of $230 million in the quarter, or $2.15, compared with an adjusted net loss of $199 million, or $1.86, a year ago. Revenues for the quarter fell 20.3 percent to $4.30 billion from $5.39 billion, mostly due to fewer stores. Comparable-store sales fell 12.4 percent at Sears Domestic stores.
Lampert said during the company’s conference call with analysts, “While this was certainly a challenging quarter for our company, it was also one that clearly demonstrated our commitment to return Sears Holdings to solid financial footing. We recognize that we need to accelerate our efforts to improve our operational performance and are moving decisively with our $1.25 billion restructuring program.”
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