Can lots of small shops save a large department store from slumping sales?
That is the strategy Sears is setting in motion after several years of failing to bring in enough in sales. The Chicago-based chain lost $5 billion over the past three years and saw sales drop 15 percent in the last quarter alone.
In order to draw customers back to its stores, Sears plans to open a series of smaller shops focused on specific customers and products. In 2017, it opened several Sears Appliances branches in places such as Texas and Hawaii, and now hopes to branch out to similar small-format locations to eventually include clothes and shoes.
“We intend to open similar innovative concept stores moving forward as we sharpen our focus on new ways to best serve our members,” Sears CFO Rob Riecker said in a conference call about last quarter’s results.
The concept store strategy has been taken on by Nordstrom and Target as well this year. Nordstrom Local, in particular, is a series of 3,000-square-foot stores that do not stock any inventory but instead offer services such as styling and alterations.
“These innovative smaller-format stores continue to showcase our company’s unique integrated retail capabilities by combining new technology, our strongest categories and in-store experts,” said Riecker.
But even with competition doing the same, the concept store strategy is risky for Sears — the company announced that it would be closing an additional 63 of its locations even after scaling down brick-and-mortar locations this year.