SEARS, KOHL’S SEE HOME SPARKING GROWTH FOR FALL

Byline: Valerie Seckler

NEW YORK — Though still heavily apparel-driven, Sears, Roebuck & Co. and Kohl’s Corp. have new designs on the home market to propel growth this fall.
Sears is launching its first catalog on the World Wide Web this month, which will sell its Craftsman tool collection, and Kohl’s will roll out expanded housewares and tabletop concept shops throughout its 172-unit chain this fall.
While news that Sears would be selling on line was disclosed at the WWD CEO Summit last June, Arthur Martinez, Sears’ chairman and ceo, provided further details Wednesday at Goldman Sachs’ fourth annual “Global Retailing Conference” at The Plaza Hotel here.
“We are within a few days of launching a Craftsman tool catalog on the Internet,” Martinez told more than 200 industry executives and analysts at the conference, which concludes today.
“I’ll be the first to admit that two or three years ago, I was one of the world’s great skeptics on electronic commerce,” Martinez related. “The time has come for e-commerce to be treated seriously.”
Retail analysts are projecting that around 25 percent of merchandise sales in the U.S. will be made over the Internet by 2005.
Sears, which for a year has had a home page on the World Wide Web for marketing purposes other than selling, will offer 2,500 Craftsmen items in its first catalog on the Net.
“We expect that Craftsmen customers on the Net will be better Sears customers overall as a result of the e-commerce, much as direct mail catalogs helped develop store-brand loyalty among shoppers,” Martinez predicted.
“We believe in focusing on multiple value captures,” the ceo said of Sears’ mission to trigger purchasing in more than one distribution channel. “There will be no unrelated diversification strategy for Sears.”
Apparel continues to be a strong growth engine for Sears’ 821 full-line stores, Martinez emphasized. About 246 of those stores are still awaiting facelifts and additional apparel selling space that have revitalized the rest of the chain.
In addition, Sears expects to announce within two weeks a location for its second store in the Bronx, said Martinez. He declined to specify the site. Sears has a store at 400 East Fordham Road in the Bronx.
Martinez reiterated Sears’ strong interest in the Coliseum on Columbus Circle for the chain’s first Manhattan flagship. Sears is one of five companies bidding on the site; The other four are real estate developers.
In the 12 months ended June 28, Sears’ comparable-store sales of apparel are up 8 percent, outpacing the 5.9 percent growth in comps notched throughout the full-line stores, Martinez noted.
Meanwhile, Kohl’s is rolling out expanded housewares and tabletop presentations after tests in the Milwaukee and Washington markets garnered strong responses, said John Herma, chief operating officer. Some better brands such as Cephalon are merchandised, in a departure from the chain’s usual moderate-price lineup.
Also showing signs of developing into significant businesses for Kohl’s are its new Bodysource line of personal care and beauty products, and its Fairway Sport private label line of women’s golfwear, Herma noted.
Apparel and soft goods for the home are expected to generate 90 percent of Kohl’s business this year, up from 81 percent five years ago. Hot brands at value prices continue to drive growth.
“Eighty percent of our volume is produced by key moderate brands like Lee, Levi’s, Nike and Starter,” Herma said. “We will not be lured by the better-price brands we are sometimes offered.”

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