The Incredible Shrinking Sears

Sears Holdings managed to get something of a surprise move in earlier this week with the announcement that it is rethinking its in-store design strategy and planning to experiment with going smaller.

That effort will kick off with a a new, smaller appliance store that will open in Fort Collins, CO. At  7,000 to 10,000 square feet, the store would be a fraction of the more typical 138,000-square-foot Sears store, according to recent reports.

The move is surprising for a variety of reason — most of which have to do with the context of Sears' recent moves around restructuring the business.

The current operating strategy revolves mostly on aggressive cost-cutting and store closures. Sears is losing money faster than it makes it these days, and a return to profitability is the company's driving objective.

CEO Edward Lampert compared getting Sears to profitability to the U.S.’s difficulty in closing the prison at Guantanamo at a meeting with shareholders earlier this week, according to reports in Bloomberg.

Appliances, however, remain a strong area for Sears, as is the Shop Your Way omnicommerce program which will be going to the appliance center pilot store.

Will it be enough to set the Sears ship right? That remains to be seen. Sears saw massive Q4 revenue declines of $796 million. As of 2016, 50 additional closures have been announced, as have layoffs.

"We have and we will be trying a lot of things," Lampert said at a shareholders meeting, according to The Chicago Tribune.

Will it be enough? Many analysts think that is doubtful and have assigned "dead store walking" status to the iconic retailer.

More on this as it develops.



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