Whats Next for Sears

 There has been a lot of coverage lately around the leadership changes at Sears as well as   several failed or failing retail merchandising strategies and the “marriage from hell” that they are wrapped up in with K-Mart.  So what’s next for this retail giant that seems to be suffering from an identity crisis?

As the progressive thinker that I like to believe that I am, I sit here wondering…should they move all sales online and abandon their dying anchor-store-at-the-mall structure and sales model?

This would be a big risk, but let’s face the facts:

• Sears currently has 3800 stores. While most of that commercial real estate probably has a lot of restrictions placed on it in terms of how it can be used, the corporation can definitely put a value on it and sell or lease it at a fair price, even in today’s slumping real estate market.

• K-Mart: Let’s face it, Tom Cruise said it best as Charlie in Rain Man with, “I’m gonna let ya’ in on a little secret, Ray. K-Mart sucks.”

• Montgomery Ward: These guys were faced with a strikingly similar situation as Sears in the 90’s with the whole identity crisis and upper-management shuffle thing and look at what happened to them. Need I say more?

Maybe I don’t need to say more, but I will add my suggestions for how they should move forward.  My 3 step plan for saving Sears is as follows:

1. Hire retiring eBay CEO Meg Whitman to replace Aylwin B. Lewis. This will be a key factor for success in step #2.
2. Reinvent themselves by moving all sales operations online and define their niche through value added services that no other online retailer can offer at the same price.
3. Sell or lease the real estate holdings of both Sears & K-Mart to other growth oriented retailers who can benefit from the use of the space without infringing on whatever marketspace still remains for Sears & K-Mart.

While their sales channels may decrease in size, they will gain the opportunity to reinvent themselves and define their space in the world-wide general merchandise retail marketplace.  Additionally, with decreased operational costs their margins will likely increase to a level that will both keep them in business and help to generate shareholder satisfaction.