Come see the softer side of Sears
The stalwart retailer with a rich history and a firm place in Americana reported sales figures for May that didn't do much to reinforce its institutional status. Same-store sales saw a glum 3.7% decrease. The domestic chain as a whole was down 4.7%, with this year's May revenues coming in at $2.08 billion versus $2.18 billion for the year-ago period. There is a vital qualifier here: This year's sales do not include the full Memorial Day weekend, since the termination point was May 29 (last year's report went all the way to May 31).
Sears also gave investors a look at the year-to-date results, and these aren't too snappy either (once again, this year's numbers only go to May 29). For 2004, sales for the first five months of the calendar for all domestic stores came in at $8.13 billion versus $8.33 billion for the similar time frame last year. That's a decline of 2.4%. On a same-store basis for the respective period, the decrease was 1.1%.
Sears needs traffic. Ergo, Sears needs to radically step up its advertising campaign, and I don't mean in terms of quantity of ads placed -- I mean in the quality of the ads and the quality of placement. A better relationship with the younger demographic needs to be established in an effort to steer some of the trendy kids heading to Aeropostale
Perhaps a fresh campaign executed via platforms such as Viacom's MTV networks or Time Warner's WB netlet is in order. Sears has made attempts in the past to pursue such a paradigm. Remember the Christina Aguilera commercials? (Hey, as a red-blooded male, I sure didn't forget them.) It should continue reaching out to youths.
As Alyce Lomax indicated back in April, Sears is having a tough time competing in today's landscape, even with positive moves such as the acquisition of Structure and Land's End, as well as the decision to exit the credit card market. Obviously, newer places like Target
And then there's Wal-Mart
Fool contributor Steven Mallas owns none of the companies mentioned above.