Even Sears’ Landlord Wants ‘Non-Sears Tenants’

It's not exactly a vote of confidence

Sears' Hail Mary is smaller stores that sell only home goods.
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If it’s going to survive much longer, Sears truly needs a miracle. Instead, it is getting Home & Life stores.

In May, it will open three such smaller format locations in Anchorage, Alaska; Lafayette, La; and Overland Park, Kan. They will stock a truncated selection of merchandise, including appliances, smart devices and mattresses.

Sears is including some touches that seem like the retailer is striving to be “modern” in the same way Baby Boomers have Facebook accounts, but are simultaneously reminders of how it has failed so spectacularly to keep pace in the Internet Era: This includes a “Search Bar” where consumers can order products online. There is an expanded selection of fulfillment options, however, including in-car pickup.

In a statement, Peter Boutros, chief brand officer of Sears and Kmart, pointed to Sears’ strength in these sectors and called it “part of our strategy to maintain a presence in markets where we have right-sized our footprint.” He was not available for further comment.

And while Sears is certainly sticking to its knitting, analysts have little faith that this is the Hail Mary that will score the beleaguered retailer a life-saving touchdown.

Bruce Winder, partner at Retail Advisors Network, agrees Home & Life focuses on Sears’ strongest businesses, but that’s where his enthusiasm ends.

“The Sears brand has sadly been dragged through the mud for the better part of decade now,” he said.

Further, Winder noted Sears is simply not a brand that resonates with consumers anymore.

“[Millennials] don’t see Sears as a spot to go,” he added. “[Sears’] former customer is the seniors and maybe the Boomers, but they’re not buying mattresses and appliances anymore. I just can’t see it working—it may in the short run, but it’s just a matter of time before it hangs up its skates.”

For his part, Allen Adamson, co-founder of marketing services firm Metaforce, said Sears’ last hope is to really reinvent itself.

“What do you do with a name people know, but don’t care about? You have to reimagine it,” Adamson said. “[Hedge fund kingpin Eddie Lampert, who appointed himself CEO in 2013 after merging Sears and Kmart in 2005,] may be the ultimate financial genius and can find pennies on the dollar, but Sears requires marketing innovation, not financial magic.”

He conceded that smaller stores are a better solution than closing stores—and appliances and mattresses are two sectors where customers still want to touch and feel merchandise. He also said this Home & Life concept could be part of the overall solution, but “they are not going to sell enough appliances and mattresses to pull the company out of the gutter.”

‘Non-Sears tenants’

This is familiar territory for Sears, both literally and figuratively:

These new locations come to cities that have previously lost at least one Sears apiece.

Rreal estate investment trust (REIT) Seritage Growth Properties plays a key role in all of this. You see, Seritage isn’t just any REIT, however. It is the REIT established in 2015 to hold the portfolio of 266 Sears and Kmart stores it assumed from Sears Holdings in exchange for $2.7 billion. (Sadly, Sears said the funds would help it “accelerate investments in its transformation to an asset-light, member-centric integrated retailer.”)

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