Chicago Tribune
Keeping quiet works when operating elite hedge funds, but it's usually not a great strategy when running a retailer.
For the past six months, Sears Holdings Corp. has been operating an online marketplace that allows third-party vendors to sell goods on its Web site. But few consumers knew about it.
Sears waited until Thursday to unveil "Marketplace at Sears.com," disclosing that its Web site carries more than 10 million products, including furniture, art, cosmetics, appliances, sporting goods and shoes.
Perhaps Sears could learn a lesson from Wal-Mart Stores Inc., which at the start of this decade also shunned the spotlight, but changed its strategy after too much bad publicity. Now, Wal-Mart goes out of its way to be heard, even as it spends relatively little on advertising.
Like Sears, Wal-Mart, the world's largest retailer, began selling merchandise from outside vendors on its "Walmart Marketplace" in August. But it took a different approach, bragging in a press release the same month that its Web site had 1 million new products.
By late fall, Wal-Mart's Web business dominated headlines. It initiated a price war over books with Amazon.com Inc. and sent Raul Vazquez, CEO of Wal-Mart's online unit, on a media tour preaching the retailer's newfound Web religion.
While Wal-Mart was going after Amazon this fall, Sears was dealing with another in a long line of executive defections. This time it was the president of Sears' online division, Jim Barr. The former Microsoft Corp. executive, hired in 2008 to ramp up Sears' Internet business, resigned late last year, Sears spokesman Chris Brathwaite said Thursday. Imran Jooma, senior vice president for Sears online, now heads the Internet division.
Sears chairman and billionaire hedge fund manager Edward Lampert made money by keeping his investment ideas close to the vest. That rarely works in retailing because merchants need to keep their names in front of consumers to remind them to visit the stores -- or their Web sites.
It's clear Lampert is keen to build Sears' Internet business, but true to his hedge fund roots, he hasn't talked much about it.
After missing the market for selling Sears' real estate, he turned his attention to reshaping Sears.com into a Web portal akin to a cyber version of the old Big Book Sears catalog. While Lampert drastically cut capital spending across the company, the Internet division got money to expand.
For now, Sears is holding on thanks to the trading down behavior of consumers who boosted sales at Kmart over the holidays.
Sears stock jumped 12 percent to close at a 15-month high of $99.18 Thursday after Sears said it expected its fourth-quarter profit to exceed last year's results, fueled by stronger sales at Kmart.
Sales at stores open at least a year, a key measure of retail health, fell 2 percent at Sears Holdings for the quarter to date, with sales down 6 percent at the Sears unit and up 2.6 percent at Kmart. For its fiscal year to date, total sales fell 5.2 percent, with an 8.8 percent drop at Sears and a 0.7 percent decline at Kmart. Kmart got a boost from assuming operations of its footwear business from a third party in January 2009.
Sears anticipates earning between $385 million and $465 million, or $3.36 to $4.06 a share, for the period ending Jan. 30, excluding special gains or charges.
"Eddie Lampert is becoming more of a retailer and less of a capital allocator given the fact that the ability to break leases has declined," said Sean Egan, managing director at Egan-Jones Ratings Co. "The company has dodged a bullet for this quarter."
For the past six months, Sears Holdings Corp. has been operating an online marketplace that allows third-party vendors to sell goods on its Web site. But few consumers knew about it.
Sears waited until Thursday to unveil "Marketplace at Sears.com," disclosing that its Web site carries more than 10 million products, including furniture, art, cosmetics, appliances, sporting goods and shoes.
Perhaps Sears could learn a lesson from Wal-Mart Stores Inc., which at the start of this decade also shunned the spotlight, but changed its strategy after too much bad publicity. Now, Wal-Mart goes out of its way to be heard, even as it spends relatively little on advertising.
Like Sears, Wal-Mart, the world's largest retailer, began selling merchandise from outside vendors on its "Walmart Marketplace" in August. But it took a different approach, bragging in a press release the same month that its Web site had 1 million new products.
By late fall, Wal-Mart's Web business dominated headlines. It initiated a price war over books with Amazon.com Inc. and sent Raul Vazquez, CEO of Wal-Mart's online unit, on a media tour preaching the retailer's newfound Web religion.
While Wal-Mart was going after Amazon this fall, Sears was dealing with another in a long line of executive defections. This time it was the president of Sears' online division, Jim Barr. The former Microsoft Corp. executive, hired in 2008 to ramp up Sears' Internet business, resigned late last year, Sears spokesman Chris Brathwaite said Thursday. Imran Jooma, senior vice president for Sears online, now heads the Internet division.
Sears chairman and billionaire hedge fund manager Edward Lampert made money by keeping his investment ideas close to the vest. That rarely works in retailing because merchants need to keep their names in front of consumers to remind them to visit the stores -- or their Web sites.
It's clear Lampert is keen to build Sears' Internet business, but true to his hedge fund roots, he hasn't talked much about it.
After missing the market for selling Sears' real estate, he turned his attention to reshaping Sears.com into a Web portal akin to a cyber version of the old Big Book Sears catalog. While Lampert drastically cut capital spending across the company, the Internet division got money to expand.
For now, Sears is holding on thanks to the trading down behavior of consumers who boosted sales at Kmart over the holidays.
Sears stock jumped 12 percent to close at a 15-month high of $99.18 Thursday after Sears said it expected its fourth-quarter profit to exceed last year's results, fueled by stronger sales at Kmart.
Sales at stores open at least a year, a key measure of retail health, fell 2 percent at Sears Holdings for the quarter to date, with sales down 6 percent at the Sears unit and up 2.6 percent at Kmart. For its fiscal year to date, total sales fell 5.2 percent, with an 8.8 percent drop at Sears and a 0.7 percent decline at Kmart. Kmart got a boost from assuming operations of its footwear business from a third party in January 2009.
Sears anticipates earning between $385 million and $465 million, or $3.36 to $4.06 a share, for the period ending Jan. 30, excluding special gains or charges.
"Eddie Lampert is becoming more of a retailer and less of a capital allocator given the fact that the ability to break leases has declined," said Sean Egan, managing director at Egan-Jones Ratings Co. "The company has dodged a bullet for this quarter."
