Sears big on The Great Indoors

By Carole Sloan -- Home Textiles Today, 11/13/2000 12:00:00 AM

NEW YORK -The Great Indoors will be one of three key corporate initiatives for Sears in the coming years, with expansion accounting for about one-fourth of the company's capital expenditure spending for 2001.

The home decorating/home renovation specialty concept, which just opened its fourth unit in Detroit, is scheduled to open at least 10 additional units in 2001, with the overall goal of 150 units, said Alan Lacy, president and ceo, Sears.

Lacy, who succeeded Arthur Martinez-now chairman-some six weeks ago, held a meeting here last week with analysts for an interim update since the transition. Calling The Great Indoors (TGI) "an attractive and potentially significant growth vehicle," Lacy said the existing stores are "tracking to more than $50 million in annual store volume after the first year." In Denver, where the first TGI opened, comps are in the high teens to 20 percent.

An important element for TGI, he noted, "is that there is little cannibalization" from the full-line Sears in the same market. The stores are "bringing us a new affluent customer."

As part of the company's commitment to TGI's growth, Lacy said that about 25 percent to 30 percent of the company's capital expenditure in 2001 will be for this format, with an objective of "building a better value box and an infrastructure. "The first four stores, he related, were essentially built to individual specs.

TGI also will launch a catalog and be programmed to have its own proprietary MasterCard program, Lacy said.

Direct-to-customer programs will be another of the three major efforts Sears will expand in coming years, Lacy said. The company, which was the largest catalog retailer, exited that business in 1993 and has a variety of catalogs produced by outside companies.

Now that Sears' online program is up and running, the company "will try to do more to support the Sears offering," Lacy said. In many cases, and especially in home textiles and home furnishings, the outside catalogs bearing Sears' name have merchandise not available in Sears stores.

"The catalog programs have worked OK, but not spectacular," he reported. And as the company has built the infrastructure for online activities including fulfillment and customer service, "we see the opportunity to improve targeting and relevance with our growing database of permissioned e-mail addresses," he said. The company already has one million registered e-mail addresses for marketing activities.

As for the full-line mall-based stores, Sears is using its marquee appliance business as the role model for other merchandise areas, Lacy explained. "With breadth, depth, and the offer of all major brands plus the one private brand, Kenmore; a knowledgeable sales staff; as well as being part of Sears online, we have a $5 billion business."

Home fashions is one of the business segments that is performing well, Lacy said. "We're making good progress in bed and bath in private brands, especially with our new Colormate program and Whole Home that we borrowed from Sears Canada," he said.