Makeover needed: Kmart and Sears


This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

When Kmart bought Sears to become Sears Holdings Corp (NASDAQ: SHLD) it seemed like a perfect match. Here were two retail titans of the 1970s who had completely missed the boat of modern big box retailers. Instead of trying to sell dowdy clothes, Sears could have concentrated on hardware and become Home Depot (NYSE: HD). Instead of selling dowdy everything with surly service, Kmart could have become Wal-Mart (NYSE: WMT).

Now what both stores need is a makeover. They need to become that bright, wide-aisle store that people love to shop at because they find neat things they didn't know they needed. Heck, if the Kmart in my neighborhood could just manage to keep its shelves stocked and not hire the surly, it would be a step up.

Both Kmart and Sears know they have trouble, but it just may be too late to make the changes. Kmart already went through bankruptcy and closed about 300 stores. They even came up with a bright, open store prototype with wide, well-lit aisles. But then they couldn't afford to really roll it out, says Shopping Centers Today. And many think they didn't close enough bad stores.

As of late October, 2008, the stock trades at about $60, down from $190 last June and $100 a month ago. That means its fallen much harder than the market as a whole. Some discount retailers are doing OK, cashing in on consumers' need to buy cheap. Wal-Mart is actually trading for more than it was last June -- or even last October, the market peak.

Kmart is reacting to the recession and credit crunch with another retro idea: bringing back layaway. Oh, man I now I'll really feel like I'm shopping with my mom in 1974. I remember that she bought me a coat on layaway once from the Robert Hall store. While getting people to buy on layaway may be great to wean the country off credit cards, I really don't think it's going to improve the image of Kmart much.

Does Kmart need a makeover? What would you suggest? Be sure to check out the other makeover posts.

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