After getting positive results from its Shop Your Way program, the beleaguered broad-line retailer, Sears Holdings Corporation , has reintroduced its shop online and free pick up from store facility in order to enhance the shopping experience of its Shop Your Way members and other customers. This is a big step for the company toward its strategy of transforming business model.
Sears Holdings intends to introduce this new facility at its 2,000 nationwide locations at Sears and Kmart stores which will facilitate Shop Your Way members to buy products online and pick up their merchandize from any of these stores. Sears Holdings was the first retailer to start free online pick up facility about 12 years ago.
Sears Holdings intends to introduce this new facility well ahead of the back-to-school season to lure more and more customers, so that when a member buys products at www.sears.com or www.kmart.com he/she can pick up their merchandize at their nearest Sears or Kmart stores.
Of late, Sears Holdings has been grappling with deteriorating top and bottom line performances. However, we commend Sears Holdings’ efforts to improve its financial performance and liquidity position through various strategic measures. One such major initiative taken by the company is transforming its business model, which we believe will help in stabilizing its declining sales.
Sears Holding, which currently sells products through store-based networks, is looking for opportunities to transform its business to a member-centric model through its Shop Your Way program. As part of this remodeling initiative, the company is heavily investing in its Shop Your Way program while strategically reducing its store count and divesting its underperforming businesses.
The recent move of providing free pick up facility to its online buyers will make shopping easier for the company’s Shop Your Way members thereby improving its top-line performance. The company’s Shop Your Way program has been a great hit as evident from its first-quarter fiscal 2014 results. During the quarter, the company’s sales through members reached its highest ever level of 74% of eligible sales compared with 68% reported in the year-ago quarter.
The company’s strategy of capitalizing on opportunities and returning to profitability through its simplified organizational structure and new operating model are noteworthy. Moreover, Sears Holdings is focusing on cost containment, inventory management and merchandise enhancement initiatives to inflate margins.
We believe that these strategies have the potential to bring the company back on growth trajectory but there is still a long way to cover.
Sears Holdings currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Better-ranked stocks worth investing in the retail industry include The Men’s Wearhouse, Inc. , Hanesbrands Inc. (HBI - Analyst Report) and Columbia Sportswear Company (COLM - Analyst Report) , each carrying a Zacks Rank #1 (Strong Buy).