Exclusive: Sears seeks fresh ideas, new agency

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Sears, Roebuck & Co. is reaching out to agencies for ideas as it tries to improve its battered position in the market.

According to executives close to the retailer-a top 10 megabrand, which spent $635 million in U.S. media last year-its senior marketers have heard informal presentations from WPP Group's Berlin Cameron/Red Cell, New York. Omnicom Group's BBDO Worldwide, New York, was also approached, one executive said, but the agency declined to present. BBDO is the agency for PepsiCo, where Sears' chief marketing officer, Janine Bousquette, was previously VP- marketing for the Pepsi trademark brands.

Berlin Cameron Chairman Andy Berlin did not return phone calls and other agency executives refused to comment, as did BBDO officials. A Sears spokesman said, "We have a policy of not commenting on rumor or speculation. When we have something to announce, we will."

Talk has been floating for months that Sears was unhappy with its roster agencies, WPP`s Ogilvy & Mather and Y&R Advertising. If Berlin Cameron, a WPP sibling, is awarded the work, it would at least keep the revenue within the holding company. Executives at Y&R and O&M did not return phone calls by press time.

Sears has struggled to fight off increased competition from rivals including big-box retailers, discounters and a rejuvenated JC Penney chain.

Home-improvement chains such as Home Depot and Lowe's have cut into its keystone appliance business, while fashion-forward discounters such as Target Stores siphoned off young apparel shoppers. Sears posted a 3.1% drop in comparable-store sales in June and is 1.6% behind 2003 for the year to date.

To fight the competition, the company is experimenting with new concepts such as the Sears Grand stores, a series of off-mall store locations with grocery and pharmacy products, meant to take on the likes of Wal-Mart. Last month, Sears acquired 61 locations from Kmart Corp. and Wal-Mart to launch a newly created off-mall store concept modeled on Sears Grand. Those stores will open in 2005.

Analysts have noted that the stores trail their rivals in same-store sales growth, and faulted its merchandising operation. Many observers have said that the company has failed to take full advantage of its acquisition of brands such as Structure men's apparel and Land's End. In a recent report, Morningstar analyst Robert Beaulieu said though Sears has made an attempt to be more fashion forward, "results aren't conclusive."

In an effort to address the merchandising woes, the company last week said it would create the position of president of Sears Retail, charged with overseeing merchandising, supply-chain management and marketing, and the expansion of the new concepts. Chairman-CEO Alan Lacy said Sears will launch an executive search for the position.

What's eating Sears

JC Penney: Rejuvenated rival

Wal-Mart: Big box stores cutting into traffic

Lowe's, Home Depot: Nabbing home-appliance buyers

Target: Trendier low-cost apparel

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