Sears Holdings Corporation (SHLD, Financial), a chain of department stores, ended the week of June 18 to 22 down 6.20%. The former retail giant's stock fell to $2.42 a share, down from $6.95 a year prior as sales continue to struggle at its Sears and Kmart stores.
The company announced earlier in the week that a Kmart store would be opening inside of a Brooklyn Sears store, with many additional stores being possible.
The mini Kmart store is just the start of mini store collaborations that the two companies are planning. Sears is also planning to introduce mini Sears outlets inside of some Kmart locations. The mini Sears shops will offer plumbing items, appliances and other small items.
The new mini-store concept is a pilot program for both companies, as sales decline and debts continue to mount. A major asset sale is being evaluated. Combining retail stores may allow the company to offload underperforming stores and combine Sears and Kmart stores in these areas.
The initiative brings the brands together under one roof. The mini Kmart is 10,000 square feet and will sell everyday items in the Sears outlet, including pet items, beauty supplies, cleaning supplies and groceries.
Kmart stores, which will include mini Sears stores, will have high-end merchandise, primarily appliances, sold in the stores and only offer opening price point appliances. The move is an attempt to bring the best-selling items from each brand to consumers. Sears will be able to sell more items with less real estate, as the company plans to close hundreds of stores in the United States.
The company is in the midst of a bid from CEO Eddie Lampert's ESL Investments hedge fund to purchase parts of the Sears portfolio. ESL Investments is interested in purchasing the Kenmore brand from Sears.
The company claims that its customers are loyal and that they've been asking for additional products, such as toothpaste and detergent, to be added to Sears stores. The move is said to meet the demands of consumers, with the Brooklyn store claiming that they're already seeing new customers as part of the grand opening event.
New York remains a strong state for Sears, making it the ideal location for the store-within-a-store concept that Sears is rolling out. The company plans to focus on their best stores. Sears has also been testing smaller store formats that reduce the amount of inventory the retailer holds by only selling appliances and mattresses out of these outlets.
Disclosure: The author does not have any stakes in the listed equities
