Sears Holdings Company

SHLD

Good Life, Great Price.Game Room Consultants

David GretzJosh Goldsmith

Ben HeilyPat Hand

Video

Sears History Richard Sears 1886 Watch Reseller 1893 Founded 1931 Allstate

Insurance 1945 1 Billion in Sales 1953 First

International Presence

1973 Sears Tower 1981 Dean Whitter &

Coldwell Banker Bought

1985 Discover Card 1993 Coldwell Banker

Sold 2005 Sears Kmart

Merger

Sears Holdings Culture Our Vision:

Sears Holdings is committed to improving the lives of our customers by providing quality services, products and solutions that earn their trust and build lifetime relationships.

Our Mission: Build customer relationships Make more money

Improve every day How We Lead:

Focus on the customerBuild and align teamsKnow how to make money

How We Work Together: Teamwork

IntegrityAccountabilityCoaching for executionPositive energyRecognition through results

Sears Offerings Brands

Craftsman

Kenmore

Diehard

Lands End

Product Categories

ApparelAppliancesAuto/motorcycle suppliescamping & rec equipmentlawn and gardenfurniture/ home accessoriestools and hardwarebabyelectronics and computershealth and wellnessjewelrymiscellaneous

3rd largest general retailer

Competition

Sears outside the U.S. Sears in Canada

Simpson - Sears Thursday, September 17th, 1953 at 9:15 a.m. 25 years New name Largest retailer in Canada

Sears in Mexico First opened in 1947 Merger with Grupo Carso

Sears in the 80’s Sear’s aggressively pursues financial

services Emerging competition

Discount Stores Specialty Stores

Challenges Merchandising operation in serious trouble Massive corporate restructuring Customers knew sears, better than sears

knew its customers Couldn’t compete with EDLP strategy Lack of information technology

Changes in Stores Remodeled departments (Power 7)

Women’s Apparel, appliances/electronics, home improvements, children’s clothes, automotive, men’s fashion, and furniture

Sold not only Sears’ brands, but also national From 50% selling space, to 70% selling space

Cut inventory held with out increasing stock outs Warehouse and distribution changes

Changes in Stores National business manager appointed

Buyers were responsible for pricing and product mix for one national format

Now, oversees each of the Power 7 departments to more successfully compete against each departments niche market.

Slow to remodel though…! By 1992, only the automotive and appliance

formats were in place nation wide.

Store Changes 1993, close 113 unprofitable stores…

Invested in more floor space for promoting fashion merchandise

Point of sale registers, IT Merchandise Assortment Planning System

MAPS

The Catalog Major money lost

145 million in 1991, 165 million in 1992 Didn’t utilize customer database Poor service

No toll free 800 number 1993 closure of catalog operations

Saved money invested in retail restructuring

Transportation/Distribution 1990, created separate company SLS

All goods go through replinishment centers Paperless environment from 100 carrier bills to 1 Closed 5 old centers, laid off 5700 employees Built 6 new warehouses

IT and Financial Services Reduced distribution expenses DOS, integrated all stores with distribution

sites through point-of-sale systems 1992 sold Dean Witter, included Discover Offered 20% of Allstate insurance in public

stock offering

Legal/Ethical Issues 2002 Class Action FLSA Waiting pays Bankruptcy Issues Customer Satisfaction Issues

SWOT Strengths

Employees Name Sears Credit Card Strategic partnerships Merger with K-mart

Larger customer base 2370 stores in USA

Strong corporate history Name/Brand recognition

Weaknesses Integration of supply

chains Poor online sales Kmart store size

Sears is 180-200K sq.ft.

K-mart is 40-194K sq.ft. Fashion merchandise Old Run Down stores

SWOT Opportunities

Cost savings through economies of scale

Expansion into Hispanic market niche in US

HUGE customer database Strategic Alliances Cash in on “Americanism” Enhance global operations Improve free cash levels

Threats Internet site Competition

JCPenny, Wal-mart Target

Bad Public relations

Buy, Sell, or Hold??? Hold for little or no risk Buy, moderate risk, potential to make $

Current stock comparisonYahoo Finance

Current Month Last Month Two Months Ago Three Months Ago

Strong Buy 0 0 0 0

Buy 3 3 3 3

Hold 3 3 3 3

Sell 1 1 1 1

Strong Sell 0 0 0 0

Sources Cramer’s Mad Money’ Recap: A Yardstick for Sears.

http://www.thestreet.com Google Finance, SHLD. http://www.finance.google.com Kmart Corp. http://www.kmartcorp.com Sears, Archives. http://searsarchives.com Sears Canada.

http://en.wikipedia.org/wiki/Sears_Canada Sears Canada Inc. http://www.sears.ca Sears Holding Corp. http://www.searsholdings.com/ Yahoo Finance, SCC.TO. http://www.finance.yahoo.com