With third Grand, Sears goes way off mall

DSN Retailing Today, August 16, 2004 by Laura Heller

LAS VEGAS -- Sears' drive to develop a new format away from regional malls continues as the chain opens its third Sears Grand unit and rolls out two new brands, even as July sales results reveal further weakness in core categories.

Sears' latest unit is so far off the mall, it's practically off the map. On the outskirts of Las Vegas in the foothills of the mountains sits its latest test: a 165,000-square-foot big box serving the region's rapidly growing community. Smaller than the two previous Grand stores opened in the past 10 months, this unit-features a revised layout based both on size and shopping patterns as observed from previous tests, while still including new categories for Sears, including pantry items, consumables, HBA, entertainment media, books and magazines.

Apparel takes center stage here, occupying a circular display in the store's center, intersecting with the wide aisle running the length of the store, which management refers to as the "boulevard." According to Harvey Isom, store manager, the new setup is a better presentation of the store's offerings.

The circular display features apparel from each segment: juniors, women's, men's and boys, with the remainder of each category across the aisle from its corresponding presentation. Shoes have been shifted to the sidewall in a self-service environment. The display has been well received and is currently being rolled out to all Sears stores, replacing the old full-service department, according to Corinne Gudovic, a Sears spokeswoman. Additionally, kids is being reset to include the new Gerber Beginnings Newborn collection.

This store boasts a more economical, unfinished, open ceiling and a single entrance, versus two doors in the previous test units. Gone, too, are the cafe and bank outlets due to the smaller scale of this unit. "The layout had to evolve based on the size of the store," said Isom. "We do have the Portrait Studio and Optical shops as well as an ATM."

The Las Vegas location includes a garden center/nursery department, something not included in the most recent Grand opening in Gurnee, Ill., near Chicago. "Customers expect us to have it, and we will," said Gudovic. Although management has said they are considering adding pharmacies, one is not present in this location but may appear in future stores, according to Gudovic.

While the chain is still experimenting with the Grand format, it is taking the lessons learned to its traditional full-line stores, rolling out programs such as the self serve shoe areas, automatic price checkers scattered throughout the store, and expanded electronics departments with entertainment software and gaming items.

Approximately 100 Sears stores are updated each year and will include these elements. In addition, 61 stores will open after January 2005 in a new hybrid format, something the company has positioned as way to spur sales and incorporate elements of the Grand concept into some of the recently acquired new stores. Sears announced last month the acquisition of 54 Kmart stores and seven former Wal-Mart units. These still-unidentified locations will be unveiled as new hybrid stores.

In spite of these many new initiatives, Sears continues to have problems realizing sales. In July, the retailer saw comp-store sales decline 2.6%, while total domestic stores sales dropped 4% for the month. The declines were led by weakness in apparel and other core categories, according to chairman and ceo, Alan Lacy.

Pushing off the mall is expected to help jumpstart sales, according to management. In addition to the 61 newly acquired units, the retailer plans to open a fourth Sears Grand unit near Los Angeles in Rancho Cucamonga, Calif., in October and Austin, Texas, in 2005.