Sears selling Craftsman tools at Ace stores: How screwed up is that? ~ Brand Mix

Wednesday, March 10, 2010

Sears selling Craftsman tools at Ace stores: How screwed up is that?

Photo: Craftsman Tools by tedmurphy (Flickr)

A couple of years ago, Edward Lampert, Chairman of Sears Holdings, signaled his intention to sell Sears' proprietary brands such as Diehard, Craftsman and Kenmore through other retail outlets. Now Sears has announced a series of deals bringing his plan to life:

  • DieHard: Accessories will be sold by retailers in the United States, Puerto Rico and Mexico. (Batteries not included!)
  • Sears Auto Centers: Will be offered as a franchise opportunity to car dealers
  • Craftsman tools: 10% of the tools will be sold through Ace Hardware in all 4,500 stores beginning this June
Back when this idea first surfaced, I offered a very balanced list of "pros" and "cons." Let me be unbalanced this time round. This is a bad idea that will hasten the demise of Sears retail stores. At a time when most other retailers are investing in their Private Label brands to create unique customer experiences to help differentiate themselves, Sears is trading away its strongest brand assets. While zagging while everyone else is zigging can sometimes be the right thing to do, this is not one of those times.

In an interview with Marketing News Exclusives, Guenther Trieb, the Sears SVP in charge of this initiative is quoted as saying:

“The fact is, unfortunately, not 100% of Americans shop at Sears. We want to reach those customers who do not come to our stores, who prefer to shop elsewhere. … Once we grow the customer base, there’s a much better chance some of those customers will go find [a greater] selection at Sears of Craftsman and Diehard [products].”
Alternative interpretation: Customers who've been schlepping to Sears because that's the only place to get Craftsman tools, DieHard batteries, Kenmore appliances etc won't have to go there anymore.

There is one scenario where this strategy makes sense: If the company's planning to shutter most/all of its stores. Then it would clearly be important to give these brands the opportunity to thrive elsewhere. Is that where this is headed?

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