Come see the harder side of Sears.
Seeking to escape the fiscal doldrums, the retail giant will shed one-sixth of its apparel lines and put a stronger emphasis on hard goods such as appliances and tools. Chairman-CEO Arthur Martinez told analysts of the move the week of Feb. 14 at a meeting in New York.
The shift is a full reversal of the "Softer side" strategy used to revitalize the chain in the '90s. Sears dumped that tagline last year in favor of the broader-based "The good life at a great price.Guaranteed."
New Sears ads already showcase more of the retailer's offerings, and coming campaigns will focus on hard-goods brands such as Craftsman. Ogilvy & Mather, Chicago, and Y&R Advertising, New York, share responsibility for Sears' advertising.
Sears last weekend began backing its Craftsman tools with a new campaign tied to racing events, including its sponsorship of the Nascar Craftsman Truck Series. Two spots from Ogilvy feature Craftsman's role as "official tools" of Nascar. In one, a wrench and other tools are tossed from car to car, starting out with a race car and winding up with a man working in his home garage. The spots will run on racing events through November; print and other media buys will support.
In a separate move that also reduces the chain's apparel offerings, Sears last week parted with Benetton due to controversy over a new "Death Row" ad campaign for the clothing marketer.
Sears and Benetton joined last summer to introduce a new line of juniors, kids and men's apparel, called Benetton USA, in 400 Sears stores. At launch, Sears executives said the only problem they anticipated was keeping enough product on shelves to meet demand. The line was expected to hit $100 million in sales in its first year and to draw in younger customers.
With Benetton USA merchandise now being pulled off shelves, a Sears spokesman said, "We are looking to others to fill the void," and pointed to the chain's sponsorship of the Backstreet Boys concert tour as one way in which the retailer is trying to freshen its image among younger consumers.
Sears had relied on Benetton advertising to raise awareness of the Benetton USA brand, but the spokesman said the chain wasn't aware of the new campaign, which features profiles of Death Row inmates, until after its launch.
"Once we saw it, we knew we had a problem," the spokesman said.
Troubled by the campaign, Sears renegotiated its contract with Benetton to gain the right to preview future Benetton campaigns. A revised clause in the contract also gives Sears the ability to withdraw from the deal without penalty if the two parties are unable to agree on future advertising. Benetton handles its advertising in-house.
As controversy over the campaign grew--and as hundreds of consumer complaints poured into Sears--the retailer decided to pull the plug on its new line. Benetton has come under fire from victims rights groups and has been sued by the state of Missouri, which claims it was misled as to why inmates in its prisons were being interviewed.
Although Benetton is known for edgy, controversial advertising, the Sears spokesman said the chain allied itself with the apparel marketer because "We thought they were past that and had come to a point where they were interested in selling merchandise.
"The whole episode is tragic, for the victims, for Sears and for Benetton," he added.
A Benetton USA spokesman said Sears has to answer to its own customers. "We're not in any kind of adversarial role with Sears," he added.
Kurt Barnard, president, Barnard's Retail Trend Report, said Sears made the right move. "Good taste [and] good sense" prevailed, he said.
Walter Loeb, president of consultancy Loeb Associates, said the Benetton loss shouldn't sting too badly. But Sears, whose comparable-store sales rose 1.7% in the most recent reporting period of January 2000 compared to the same period last year, still has a need for strong fashion appeal, he said.
"Apparel is the one thing that generates repeat business."
Mr. Loeb said Sears also is focusing more on price these days, noting the chain's marketing and merchandising executives seem to be moving to "having sales 52 weeks a year, or maybe 104."
One company executive defended the current strategy. "We're not well," he said, "but we're recovering."
Contributing: Mercedes M. Cardona.
Copyright February 2000, Crain Communications Inc.