Sears Plans Happy Holidays

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NEW YORK -- Sears, Roebuck and Co. begins a raft of measures to boost its direct marketing business in time for the holiday season.


Chief among them is an enhanced relationship with retailer KB Toys to handle toys fulfillment for Sears' famed Wish Book holiday catalog and sears.com. Simultaneously, Sears is rolling out a new fine jewelry catalog.


"Sears.com will be profitable this year. It's a goal we set back in 2000," Dennis Honan, vice president and general manager of Sears' Customer Direct division, told DM News at the National Retail Federation's Shop.org e-commerce conference here yesterday.


Honan would not disclose the online sales, but he stressed that gift categories like toys and jewelry are critical to holiday plans for Sears, Hoffman Estates, IL.


Sears, which last year posted sales of $41 billion, exited the toys business in its stores many years ago, though not its Wish Book. The return to toys in stores is in response to consumer demand for that offering during the holiday season.


Sears struck a store-within-a-store deal with KB Toys last year. Twenty-nine "KB Toys at Sears" shops were tested in Sears stores in Los Angeles, Chicago, Detroit and Mobile, AL. There will be 77 starting in mid-October.


On the direct side, KB Toys becomes the exclusive supplier of toys for the Wish Book and sears.com. The book will carry 900 SKUs of toys out of 1,600 items. The assortment of toys and video games is 2,500 SKUs online.


A new "My First Craftsman" toys line will be part of the toys sold on Sears' online and offline channels, as well as KB Toys' independent stores. This line is modeled on Sears' established tools brand. The holiday 2002 Wish Book promotes this new line on its cover.


While KB Toys will handle fulfillment for the toys, Sears will continue to take calls and support the front end. Both companies will merchandise jointly.


"We're able to leverage all their buying power for toys and merchandising capabilities," Honan said of KB Toys.


In another change, Sears even more tightly integrated its Wish Book with the sears.com flagship site. Typing in the wishbook.com address now leads directly to sears.com/gifts. This new address is listed alongside the toll-free number on the 69-year-old catalog's cover.


"We've revamped our whole gifts section on the Web site in time for the holiday season," Honan said.


Breaking the mold again, Sears started dropping its jewelry catalog this month to a cross-section of its database of 60 million customers. The final of three drops is set for mid-October. Honan would not disclose circulation.


"This is our initial launch so we're being conservative in terms of circulation," he said. "We're not blasting it out to the entire Sears file."


The line already sells in Sears retail stores.


"Fine jewelry is one of the fastest-growing categories in our stores since 1998," said Ann Woolman, senior public relations manager at Sears.


Sears also is recognizing the growing Hispanic influence on e-commerce. Sears.com has 150 online brochures in English and Spanish. That number will increase to 300 for home electronics by the holidays, a year after the pilot for camcorders proved its worth.


A twist in all these developments is Lands' End, a $1.6 billion cataloger and online retailer. Sears acquired the Dodgeville, WI, company in June for $1.9 billion. Lands' End merchandise this fall will be featured in 184 Sears stores and all stores by spring.


"For Lands' End, being able to go into retail stores allows us to reach the 90 percent of customers that don't buy through catalog and online," said Bill Bass, senior vice president of e-commerce and international at Lands' End. "And then, for Sears, what Lands' End gives them is a brand in apparel that has the same quality and attributes of [Sears'] Kenmore and Craftsman brands."


Of course, there is Covington, a new apparel line Sears introduced recently. Covington would seem like competition for Lands' End.


"Covington is being positioned in the good, better, best series," Bass said. "Covington is being positioned as the better brand and Lands' End as the best brand. And then you'll have other things in good, national brands not owned by Sears but sold there."


Integrating channels underpins all progress at Sears' direct arm. For instance, 30 percent to 40 percent of Sears online sales are picked up in its stores. Roughly one-fourth of these store pickup sales are incremental. And sears.com influences about $500 million a year of appliance sales in stores, the company claims.


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