Kmart-Sears are ONE

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http://story.news.yahoo.com/news?tmpl=story&u=/ap/20050324/ap_on_bi_ge/sears_kmart_merger_1
Faded retail powers Sears, Roebuck and Co. and Kmart Holding Corp. hope their $11 billion merger can create a profit powerhouse while helping to reverse years of lagging sales.
The pairing of longtime industry rivals was poised for final clearance Thursday, four months after the proposal engineered by Kmart Chairman Edward Lampert was unveiled.
Shareholders of, first, Kmart and then Sears were expected to approve the merger at separate meetings at Sears' sprawling headquarters in suburban Hoffman Estates. Barring a last-minute hitch, the complex will now house a new retail titan named Sears Holdings Corp. with $55 billion in revenue, 3,800 stores and an uncertain future.
The merger will create the nation's third-biggest retailer behind Wal-Mart Stores Inc. and Home Depot Inc. and bring together Sears' top brands Craftsman and Kenmore with Kmart's successful Martha Stewart (news - web sites) and Joe Boxer product lines. It also furthers Sears' strategy of moving away from shopping malls to the more profitable off-mall sites that Kmart stores typically occupy.
But since each firm has struggled on its own, it remains to be seen whether the combined company can manage to keep up with thriving competitors.
Lampert, whose investment firm controls Kmart and is Sears' largest individual shareholder, has orchestrated a financial turnaround at Troy, Mich.-based Kmart since it emerged from bankruptcy in 2003. The discounter turned a $1.1 billion profit last year, although it was largely the result of selling off real estate as sales continued to decline.
He and Sears chairman and chief executive Alan Lacy, who will be CEO and vice chairman under Lampert at Sears Holdings, say the merger should save $500 million over the next three years. That means announcements of widespread store closings and staff cuts may be imminent.
After boosting profits at Kmart, Lampert faces a similar challenge at Sears, where sales have slipped lower for four consecutive years and the $1.9 billion acquisition of Lands' End three years ago hasn't worked out. He has already signaled a change in direction last month with the announcement that dozens of earlier-acquired Kmart stores would be converted to a new mid-sized store format called Sears Essentials.
Analysts are skeptical about prospects for a retail turnaround.
"We think Eddie has the Midas touch, and in the short term I expect him to cut costs out of the business and extract value from some of Sears' non-strategic assets," said retail analyst Kim Picciola of Chicago-based Morningstar Inc. "But over the long term, we just don't see this combined retailer effectively competing against the Wal-Marts and Targets of the world."
Retail consultant Howard Davidowitz expects Lampert to take the same approach at Sears to generate cash that he did at Kmart: sell assets, cut costs, reduce inventory and raise prices.
"He recognized Kmart was a cadaver and he monetized it," Davidowitz said.
"For the short term, it's very exciting. But for the long term, watch out," he said of the strategy, forecasting a "bleak outlook" for Sears unless the move away from malls is successful.
Independent retail analyst Richard Hastings thinks that by maintaining Sears' strength in appliances and adding Kmart's Martha Stewart tag, the new company can prosper.
"It's about profitability, it's not about sales," he said. "It may get smaller, but ... it's going to be more profitable, more stable, with a better strategy. And it'll be more competitive with Wal-Mart and Target."
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Kmart is a phony organization. What p o's me about them is that a while back they were filing for chapter 11 bankruptcy and caused stockholders like me to lose all their shares. Now all of a sudden they reorganize and are able to buyout Sears and become the 3rd largest retailer by screwing previous stockholders out of their shares. Warning! Becareful about purchasing their stock. Wal-Mart will eventually clobber them and they will again file for chapter 11. They are already taking a huge loss on their Lands End product line. My 2 cents worth on Kmart.

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Don;t blame K-mart. They only took advantage of the great laws of this country. And brought to you by those people who know everything. And before anyone starts to point fingers at democrats or republicans , remember they both had time to change the laws. Guess this did some what, harder now I hear for people to file . How about co's. And the ultimate insult is I thought oh well I can still use the stock certificate out in the outhouse. Trouble with that they are in street name. Damm what will I use now?
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Boy oh boy, am I going to get flamed on this opinion. Wait a moment while I get out the leather breeches.....
The problem with any super major corporation is that the public interacts with the worker bees, who in turn have team leaders, supervisors, managers, and so on up the management ladder. Any employee who has any potential, is promoted. Thus the worker bees report to the new (read young), the inexperienced, or the incompetent. All others have been promoted so that the good managers of people, the supervisors / managers with innate leadership skills have other managers reporting to them not worker bees. An isolation, and communications, problem can develop between the worker bees and the managers who can make a decision. In frustration, the worker bees have high turn over, which causes hiring and employee selection errors, which causes... Low pay, and other management / employee problems also have an effect on what the customer sees. The larger the corporation, the worse the problem.
At both Sears, and K-mart, I have been frustrated, and on more than one occasion very angry, at the worker bees who have a "I just work here," or worse, attitude. Wal-Mart will at some point will find they have a similar problem. I suspect at some specific Wal-Mart stores, this is already a problem. Any one remember when going into a BORG and having a licensed electrician on duty in the Electrical Dept. Again YMMV at each store.
So what does this have to do with Woodworking? Well just this: Sears tools and hardware will suffer even more under the new Sears-Kmart merger than it has over the last few years. Anyone who purchased tools from Sears before 1980 (actually prior to Sears Tower in downtown Chicago) knows the high point of Craftsman branded tools was sometime prior to 1977.
So my suggestion: Craftsman be pulled out of Sears and Kmart. Set up as a separate entity. Then have Snap-On tools purchase the Craftsman business. Or better yet, save the Craftsman power tool line by a buy out by a Japanese power tool company. In short, any option, that separates the Craftsman brand-name from the Clothing, houseware, and toys that a company like the new Sears Holding Company will produce.
What the hell, I bet even if the BORG were to purchase the Craftsman and the Kenmore appliance line, it might in the long run save the brands product line. At least for a few years until same problem of promotion of the leadership skilled people continues.
Phil
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What is "BORG"? I know the Star Trek BORG, but not what you are referring to here.
Another Phil wrote:

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USENET READER wrote:

BORG means Big Orange Retail Giant, in short Home Depot.
Also, along this thread, Craftsman tools (at least the hand tools) might be better off if they separate them as someone above mentioned, but, as far as I am concerned, the Kenmore brand and the Craftsman power tools brand (the ones that develop 2HP if they have a tail wind are no load) can BOTH be discontinued. I have had some major pains in the butt from Sears and their way of servicing Kenmore appliances. That's why I won't buy another one. Sears has also adopted a new attitude around our area. If you ask about the difference in cost for the items on the shelf versus the Sears catalog store or online shopping with Sears, the store people quickly make it VERY CLEAR that the retail stores and online shopping are two completely separate entities. They won't even deal with themselves.
Oh well, just my 2 cents worth.
Paul
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Paul:
I fully agree with your comments as how the brands are today.
Completely agree.
But suppose, just suppose, what would happen under a different corporate entity? Could the brands, and their customer service be revived. Could Sears Craftsman and Kenmore service parts web page be better? Could a revived corporate entity actually co-ordinate Web and Show-room sales so the same warehouse and installation people installs the Kenmore major appliances without the current bickering and backstabbing?
My point was, and is, Craftsman and Kenmore Service Parts could be doomed by this merger. Consider your own personal experiences with "customer service" with Kmart and extrapolate that to Craftsman and Kenmore "customer service" in the future.
Phil

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You guys write letters llike you haven't been inside a Sears store in the past ten years. Where do you get all that misinformation. Why do you think that a decline of Craftsman quality is the death of Sears.
When I visit a Sears tool section I find tools there from many different manufacturers. Do you want Porter Cable? Do you want DeWalt? These are all for sale at Sears. I find the service at Sears is far better than the local big box. In visiting Home Depot the price may be slightly lower but the service is non-extistant.
The Craftsman name means many things. Sears doesn't build any tools themselves. They put the Craftsman name on a tool that they purchase from somebody else. Often times it is a really cheap tool that we would not get pleasure from. Craftsman does carry a line with a Professional name that is a high qualilty tool.
I frequently shop at Sears but I rarely buy the Craftsman tools.
Dick
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Richard Cline wrote:

I'd qualify that to "perhaps higher quality than equivalent Craftsman-branded tool"... :)
My experience w/ them is that there's a lot of variation there as well, and few if any that I would rate as really "high" quality w/o a caveat...
IM(NSH)O, YMMV, $0.02, etc., ...
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I'd love to see how they turn a Kmart into a "Sear Essentials" store. They claim they don't shut them down. However, they keep them running while they change them over.
That sounds nice, but 90% of the Kmart stores here are so dirty and run down they would need a wrecking ball as part of any changeover to Sears and actually running the store while doing the remodeling needed would be almost impossible.
I hope this isn't a sign that a Sears Essentials store is simply a cleaner Kmart with a Sears sign on the front. If it is, it will fail. You have to strip these buidings and totally redo them to make them someplace a customer wants to shop.
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[snip]

Isn't that the truth. I remember reading a few years ago that Wal-Mart's market research showed that more than half of the people shopping at Wal-Mart had a K-Mart store closer to home but went to Wal-Mart anyway.
-- Regards, Doug Miller (alphageek at milmac dot com)
Nobody ever left footprints in the sands of time by sitting on his butt. And who wants to leave buttprints in the sands of time?
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Just be careful don't buy any Kmart stock, or some day you'll have to eat it like a lot of people did before they previously filed chapter 11! I'll bet money that they have to again in a year or 2.
wrote:

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Sam wrote:

Now, nobody does woodworking naked. Has anyone heard what will happen to Land's End? I thought it was a going concern and now that Sears owns it and K-Mart is going to start putting their 2 cents into the catalog, too, who knows what will happen next?
Josie
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Another Phil wrote:

Phil,
You raise a good point, but, the way I see it, a different corporate entity may not be the answer. Sears has changed their "corporate standards" a few times that I can think of... For one, have you noticed that there are Craftsman Tools (with lifetime warranties) AND they are now fronting Sears brand handtools with NO warranty. Cheaper price and cheaper tool. Also, as I said before, the online sales and retail store sales are separate entities now. They used to be more than happy to order items that the customer couldn't find at the retail stores, now, they couldn't care less. The new corporate entity idea will work, but, ONLY if the new corporate entity creates and enforces new policies that truly demonstrate that they are there to help the customer. That means customer service of ordering out-of-stock items (like a catalog store), quickly and efficiently getting to customers that own Kenmore appliances that need repair, QUICKLY (not more than a month) getting the necessary tools and parts to repair those appliances, AND MOST OF ALL, selling Craftsman, Kenmore, or whatever brands of goods that are really good enough for people to want to own. Why else did they have the corporate idea a few years back to start selling so many other brands?
I think they were starting to realize that their motto had changed from: "Sears where America shops" to "Sears where nobody shops"
Paul
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I predict in 2 to 3 years kmart and sears will fold.

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As originally applied to Home Depot, Borg is in fact the Star Trek Borg, the abbreviation just happens to fit with Big Orange, etc. Key concept is assimilation as applied to Home Depot and the big square box space ship used by the Borg.
Mutt
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commission only paying job, I did see a lot of associates with only their own interests in mind when working with customers. In 2004, I took a part time job at a Sears Appliance and Hardware Store in N. Illinois. I have to tell you that I've never worked with people more dedicated to pleasing the customer. From the manager on down, customer service is fantastic. I've observed many customers who seem to stop in regularly just to visit with the associates, many times with no purchase in mind. One customer stops in at least once a week to see me and talk. I've never sold him anything, either. One thing that makes all this possible is the fact that we're paid by the hour and don't have to worry about losing a sale and money if we spend too much time with one particular person. And maybe another factor is most of us are older, semi-retired and just all around nice people to be around.
Tom.
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Another Phil says...

The problem with Sears and K-mart is that they are old and Wal-mart and the BORG are new. If you are new, you build big new stores in the best and most affluent locations in exurbia near the busiest highways. If you are old, then your locations are smaller, less clean, less modern and quite possibly in declining neighborhoods and/or buried deep in city traffic. If K-mart/Sears is to make a serious go, then they need to build new, build big and compete on price. If they can't or won't do that, then they should liquidate now and stop flogging a dead horse.
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Sears has built at least one brand new store here in the Minneapolis, Minnesota area. Actually, they built a small Sears store about 6 or 7 years ago, and then they built a full size store on one level about a mile away. This is a big box style store, not an anchor store in an enclosed mall.
The only thing I buy from Sears is Kenmore appliances and Craftsman hand tools. I believe they still have a good value in appliances.
I avoid Kmart like the plague, but the local Kmart was recently remodeled on the outside and looks like new. I have no idea if they touched the grungy interior.
Brian Elfert
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We have a new (3 years) K Mart in town and I often go there rather than Wal Mart. The big advantage is parking. Almost no one goes to the K while the Wal store is jammed. For the most part though. Wal Mart has better selection and brands though.
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