Will Sears Go Exclusively Online?

We were a little late running across this snippet (scroll to bottom of link) in the New York Post that poses this blind-item question:

“Which executive of a top ten national retailing chain is thinking about separating his ailing company from its real estate and putting the entire operation online as a rival to Amazon.com?”

We’re pretty much convinced that they’re talking about Sears. Is there a retailer out there that would be a more obvious candidate?

However, we’re not convinced that this would actually happen. Are people really ready to buy washing machines online?

Or do you think it’s another retailer or that the Post is just causing a ruckus?


11 Responses to “Will Sears Go Exclusively Online?”

  1. 1 Scott May 29, 2008 at 9:45 am

    Perhaps it’s Borders. I overheard a piece on Marketplace a couple days ago.


  2. 2 iritter May 29, 2008 at 9:52 am

    But is Borders a “top ten national retailing chain?”

  3. 3 Nancy H May 29, 2008 at 9:54 am

    I think it’s Sears. They started out as a mail-order, catalogue sales company and the Internet is just a quicker way to get your big catalogue out to people all over the world. I remember when I was really little, the Sears catalogue would come – the size of a telephone book – and my mom would sit down and pour through it page by page. They made their business a success trough catalogue sales. With today’s difficulties in the commercial retail market – it makes perfect sense that they would return to this proven method of sales to rebuild their success. Gotta be Sears…

  4. 4 Nancy H May 29, 2008 at 10:01 am

    Ian – per your comment “Are people really ready to buy washing machines online?” – in the early 20th Century Sears had quite a bit of success selling “Kit” homes through their mail-order catalogue – you could by a 1920s style California Bungalo Kit from their catalogue for just over $4,000. People will buy anything online or by mail order if the price is right and the quality is good. Large items are usually delivered by the store anyway – so aside from the ‘touchy-feely’ experience, there really is no difference from buying in the store or online…except that you save the gasoline you would use driving to the store…

  5. 5 Vincent Vega May 30, 2008 at 8:25 am

    This could be the perfect way to maximize the value of the company, by (a) seemingly bringing a tired retailer into the 21st century, while really just returning to its catalog roots and (b) totally separating the merchant from its very valuable real estate. Two questions, though: 1. Much of the Sears real estate is in enclosed malls, which are (increasingly?) out of favor at the moment…is this the best time to unload the real estate? 2. How much of Sears retail business will translate to the internet; that is, are the vast majority of Sears customers net-savvy?

  6. 6 James Quirk June 2, 2008 at 9:04 am

    I’m not sure that Sears going all-online makes tremendous sense. The company doesn’t really offer consumers anything that they can’t get somewhere else. So if the brick-and-mortar stores vanished, what exactly would drive people to buy items on Sears.com? How would Sears differentiate itself from Target.com or even Wal-mart.com?

  7. 7 Robert Hawley June 2, 2008 at 1:38 pm

    I believe the decision to put the entire operation on-line is the RESULT of deciding to sell the real estate, not the other way around. Sears has over 900 full sized stores and 1,100 specialty stores in the US alone. Although industry retail sales are down, there are several retailers that would step into Sears position in regional malls in a heartbeat, namely Walmart, Costco and Target. And under most of the Reciprocal Easement Agreements between department stores and developer, there are very few restrictions in the name and operation of those stores. Sears can see the writing on the wall: stock is down from 180 to 80 in about a year. Strategy: take the capital from real estate sales and invest in on-line sales and intellectual product.

  8. 8 totaltransformation June 2, 2008 at 4:23 pm

    “take the capital from real estate sales and invest in on-line sales and intellectual product.”

    Sounds like a good strategy to me, as long as they pass the savings on.

  9. 9 gingsir June 2, 2008 at 5:09 pm

    I personally don’t think there is a lot of crossover in customers between a catalogue company and an internet company. The sort of customers who used to buy from a Sears catalogue are not the ones who do a google search for their buying now.

    However I do think that these customers are now a large proportion of the ones who go to Ebay for household items and that’s a huge number, though I don’t have the figures on this.

    I wonder how much trade Target and K Mart are doing online anyway or is it just to have a presence in a market they don’t have a lot of experience in.

    Just my two bits.

  10. 10 TeenyTiny June 4, 2008 at 1:55 pm

    Sears needs to do SOMETHING, if they want to stay alive. Ridding the company of expensive real estate is certainly one way of doing it. From a marketing point of view, management can spin it like the “Coke Classic” sales pitch of going back to their beginnings. Sears used to be a very prestigious name, a real hallmark of the merchants of yesteryear, real Americana. Somehow, they’ll need to recapture all of that feeling, that’s when they’ll succeed. America is in dire need of returning to its values that made this country great. Middle America is going the way of Sears, undervalued, overtaxed, and overwhelmed by competition. I hope they pull it off.

  11. 11 Driver One June 11, 2008 at 2:42 am

    For the last ten years of Woolworth’s existance the only money it made was from subleases of it’s former facilities. The typical Sear’s lease provides well below market rents, innumerable fixed rate options and allows the company to do anything it wants with the space, including subleasing to any type of retailer. Mr. Lampert has proven that he doesn’t give a damn about retailing or any of the “nostalgia” about the Sear’s legacy – he’s out to create value for his shareholders.

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