Sears Holdings Reaches Out to Holding Companies for Consolidation

Procurement-led Process Seeks Ideas for Structuring, Staffing Massive Account

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Sears Holdings has reached out to agency holding companies for a potentially sweeping agency consolidation.

According to executives familiar with the matter, the company has reached out to all of the major agency holding companies, asking them to present ideas on how to structure and staff the retail giant's accounts, which are spread among a number of agencies.

According to these people, Sears sent a two-page document containing information on an "agency structure project" for 2015. In the document, Sears asks agency holding companies for information on how they would structure and support the account, which incluces Sears and Kmart, as well as its Craftsman, Die Hard and Kenmore brands. The scope includes merchandising, packaging, media buying, media placement, multicultural, social, mobile, search, direct marketing, catalog work, loyalty, brand positioning and more.

The move comes as Sears Holdings has been struggling with declining sales and store closings. This summer, it reported its ninth consecutive quarterly loss. Chairman-CEO Eddie Lampert has been looking for ways to turn the tide and boost value for shareholders. Earlier this year, Sears spun off Land's End, and on Friday, the company said it was looking to sell 200 to 300 properties to a real-estate investment trust.

In the document sent to holding companies, Sears does not explicitly state it is looking to consolidate with a single holding company. Still, many people believe that is the goal, given the process is largely price-driven and procurement has a key role.

Multiple people also said the pitch is unusual because many of the retailer's senior marketing executives have not been part of the process. The company is in the midst of meeting with various holding companies and is expected to narrow down the contenders in early December. According to the document, Sears is aiming to have the process wrapped up by the end of January, so the agencies can begin work February 1.

Sears Holdings works with a number of agencies on various accounts, but lead creative work for Sears is currently at Dentsu Aegis' McGarryBowen in Chicago. Lead creative for Kmart is at Interpublic's FCB's Chicago office. Havas handles media for both brands as well as creative for the Kenmore, Craftsman and Die Hard brands, which it won earlier this year. Kmart in early 2013 held a review, but FCB ultimately kept the account, later releasing headline-grabbing campaigns like "Ship my pants."

Agencies currently working on the business either declined to comment or could not be immediately reached. Sears Holdings did not respond immediately to a request for comment.

Sears Holdings is the 27th largest advertiser in the U.S., according to Ad Age DataCenter, with an estimated $1.3 billion in ad spending in 2013. Sears is by far the biggest brand in terms of measured media spend, with $341 million in the U.S. in 2013, according to Kantar Media, while Kmart spent about $209 million on U.S. measured media spend.

Contributing: Alexandra Bruell

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