Sears wants a better Great Indoors

By Andrea Lillo -- Home Textiles Today, 9/1/2003 12:00:00 AM

HOFFMAN ESTATES, IL —

Fine-tuning its business strategy, Sears' The Great Indoors division has a long to-do list ahead of it: remodeling stores, launching a new private label program and revamping its marketing message.

Under The Great Indoors label — "a great asset to leverage," said Jeff Jones, Sears' senior vp and general manager of The Great Indoors — the private label program is expected to launch within six months in such categories as bedding, bath and tabletop.

"Clearly we see opportunity in these categories," he said. "This program will offer better quality products at better prices than branded product."

Operational enhancements have been implemented over the past six months to help boost profitability. The chain is working to enhance inventory management by leveraging Sears' transportation and distribution network, improve product replenishment, broaden product assortments, optimize floor space and improve product sourcing.

"We have our hands full until Nov. 15"— when The Great Indoors will shift focus to the holiday season, Jones said.

The Chicago market was the first to implement these initiatives. The company received a "good read" from customers and will begin rolling out changes to the rest of the chain.

In the meantime, the company will close three stores — Arlington, TX, Willowbrook, TX, and Cincinnati — a process that should be completed by yearend. The Great Indoors unit in Shelby, MI, will be converted to an outlet. After the closings, the chain will consist of 18 doors.

The outlet store will look "more schlocky," Jones said, but it will still resemble The Great Indoors. The assortment will include best sellers as well as clearance and discontinued merchandise. He cited Lands' End outlet stores as a positive example, noting that a third of their merchandise consists of best sellers, and the store performance is "phenomenal."

The TGI division will eventually resume store growth, Jones added, but for now will concentrate on improving operations.

Other changes include adding signage called "merchant's choice" that informs customers about the features of certain products and provides expert tips. Approximately 600,000 direct mail pieces were also recently mailed, and new advertising bowed in newspapers on Aug. 31.

Sears anticipates recording an after-tax charge between $75 million to $100 million in the third quarter.

"We have high expectations for the future growth of The Great Indoors. Our leadership team has identified the major strengths of the format, as well as opportunities to serve the customer better, while improving the stores' overall operational performance. We are redirecting the stores to further strengthen an already powerful customer proposition, as evidenced by the chainwide individual store average sales of more than $30 million per year."