Sears Holdings Essay

Sears Holdings (Sears Holdings Corporation) is a retailing chain operating in the United States and Canada through its subsidiaries. As the parent company, Sears Holdings operates Kmart and Sears Domestic specialty retail stores (in the United States) and Sears Canada specialty retail stores. Sears Holdings was incorporated in 1916 and now employs around 330,000 people (as of January 1, 2008). Sears Holdings is an Illinois-based company, formed by the merger of Kmart Holding Corporation and Sears, Roebuck and Company in 2005. Its headquarters is located in Hoffman Estates, Illinois. Sears Holdings is quoted in the New York Stock Exchange with the ticker symbol of SHLD. It has approximately 22,000 shareholders (as of January 1, 2008).

Sears Holdings generates its revenues through three business divisions: Sears Domestic (55 percent of its revenues in 2007), Kmart (35 percent of its revenues in 2007), and Sears Canada (10 percent of its revenues in 2007). The Kmart segment operates stores that offer general merchandise, including products sold under various labels, such as Jaclyn Smith, Joe Boxer, and Martha Stewart Everyday. It also offers home appliances, including Kenmore-brand products, and groceries, as well as operates in-store pharmacies. The Sears Domestic segment operates stores that offer a range of products, including, but not limited to, consumer products, home appliances, household products, consumer electronics, casual clothing and accessories, footwear, fashion products, and beauty products in the United States and Puerto Rico. In addition, this segment provides retail-related residential and commercial product repair services. The Sears Canada segment conducts retail operations in Canada, and offers apparel and other consumer products. Thus, the company’s key products and services include the following: (1) products: appliances, auto, baby, clothing, electronics and computers, fitness and sports, home products, health and wellness, jewelry, lawn and garden-related products, shoes, tools, toys and games, and flowers; (2) services: car rental, hearing aid centers, home improvement, Sears photos, portrait studio, product repair services, carpet and air duct cleaning, and garage door installation.

Sears Holdings operates 2,317 full-line and 1,100 specialty retail stores in the United States through Kmart and Sears Domestic and about 380 full-line and specialty retail stores in Canada through Sears Canada Inc. (as of February 1, 2008), in which Sears Holdings owns a stake of 70 percent as a subsidiary. Sears Holdings has numerous subsidiary companies. Some of these companies include Big Kmart, Kmart Corporation, Kmart Little Caesar’s Pizza, Land’s End, Orchard Supply Hardware, Sears Canada, Kmart Holding, Kmart Management, Sears brands, Sears Financial Holdings, Sears Holdings Management, Sears Reinsurance, and Sears, Roebuck and Co.

Historically, Sears Holdings was developed through two separate entities as Kmart Holding and Sears, Roebuck and Co. Kmart Holding was originally formed in Delaware in 1912, as the successor to Five and Ten Cent Stores, a company founded by S. S. Kresge in 1897. The company name changed to Kmart Holding in 1977. In 2003 Kmart and its U.S. subsidiaries and affiliates filed for Chapter 11 reorganization process in the U.S. Bankruptcy Court. Sears Roebuck was established as a mail-order business in 1886. In 1953, it formed a joint venture with the Canadian merchandising company, Simpsons, to form Simpsons-Sears (now known as Sears Canada). In 2004 Sears Roebuck acquired ownership and leasehold interest of off-mall stores from Kmart and Wal-Mart. In 2005 Kmart Holding and Sears Roebuck were merged under the name of Sears Holdings.

A strength of Sears Holdings is its differentiated products. The company offers a broad range of products through its different divisions. These wide product offerings differentiate the customer base; therefore, they serve as a market entry barrier and help Sears Holdings compete with rivals. Sears also has a balanced brand mix. By blending self-owned private labels and outside brands, Sears Holdings decreases the chance of the occurrence of unsuccessful products and balances revenue growth and margins. Also, the company’s market positioning is another strength. Its strong market presence in the United States and Canada boosts revenues, enhances its bargaining power, and increases the brand image of the company.

Bibliography:

  1. Jonathon J. Bean, “Julius Rosenwald: The Man Who Built Sears, Roebuck and Advanced the Cause of Black Education in the American South,” Journal of American History (v.94/2, 2007);
  2. David Collins and Kelley Rainwater, “Managing Change at Sears: A Sideways Look at a Tale of Corporate Transformation,” Journal of Organizational Change Management (v.18/1, 2005);
  3. Economist, “Business: In the Wake of Wal-Mart; American Retailers,” Economist (v.373/8402, 2004);
  4. Noushi Rahman and Alan B. Eisner, “Kmart-Sears Merger of 2005,” Journal of the International Academy for Case Studies (v.13/4, 2007);
  5. Ranganathan, Analini Shetty, and Gayathri Muthukumaran, “E-business Transformation at the Crossroads: Sears’ Dilemma,” Journal of Information Technology (v.19/2, 2004);
  6. Sears Holdings, www.searsholdings.com (cited March 2009);
  7. Transportation Business Journal, “Sears Holdings Corporation: Sears.com Expands Its Online Shopping Experience With Massive New Assortment of Automotive Parts and Accessories,” Transportation Business Journal (December 7, 2008).

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