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The merchandise mix has also been altered. Some 30 slow-moving and less profitable lines, including men's hunting clothes, movie-camera equipment :and automobile air conditioners, have been thrown out. Others have been reorganized.
The electrical department used to include fans, heaters, lighting fixtures and small table appliances. These items have been dispersed around the store. For example, kerosene and electric heaters are now grouped together. Says Brennan: "We're really changing the face of the store, not the soul. We want people to say, 'This is Sears, but it's different.' "
The most striking difference in the new Sears is the emphasis on apparel. Whereas in the past, customers had a choice only of Sears' own lines, they can now find national-brand merchandise as well as labels bearing the names of celebrities. In the jeans department, Levi's can be found next to Sears' familiar Tough-skins. The men's departments have an Arnie line, named for Golfer Arnold Palmer, which includes $95 tweed sports jackets, and will soon carry Johnny Carson suits. Women can find garments bearing the labels of Model Cheryl Tiegs and Tennis Player Evonne Goolagong. Adding fashion to its fundamentals has been a surprising hit. The Tiegs line has generated an estimated $200 million in sales during its first 15 months.
But the strategy of promoting national-brand fashion clothing is risky. It puts Sears in direct competition with such off-price retailers as Marshalls and TJ. Maxx, which sell name-brand merchandise at less than full markup. Warns one retailing analyst: "A lot of business is going to come out of Sears' hide."
The effort and money expended to create this retailing look are not aimed just at attracting new customers. Sears estimates that 75% of all American households already shop at Sears at least once a year. The firm has 24 million active credit-card holders (more than American Express) and an additional 12 million catalogue customers. Sears wants to entice current customers to buy more once they are in the store. So far the company thinks it has succeeded. In the new stores, according to Brennan, "the average transaction per customer is substantially higher. In towels, washcloths, carpeting, toilet covers, for instance, people are picking up armfuls." At new stores in King of Prussia, Pa., and Valley Stream, N.Y., sales per sq. ft. are projected to be 50% higher than at newly opened traditional stores.
ore sales per customer translate into higher profits for Sears' merchandise group. Net income climbed 164% in the first nine months of 1983, to $320.5 million. Competitors are beginning to take notice. Says Floyd Hall, chairman of Target discount stores, a division of Dayton Hudson in Minneapolis: "From what I've seen, I'm impressed. Obviously, they are doing a lot of things right."