Earlier this week, an industry trade magazine alleged that we’re not “engaged” in our apparel business. Nothing can be further from the truth.
Effectively managing and improving the operating performance of our apparel business is one of Sears Holdings’ top priorities in 2016, as our Chairman and CEO Eddie Lampert recently referenced. Our apparel business has a substantial impact on the company’s overall profitability and is one of the keys to our efforts to generate positive Adjusted EBITDA in the near future.
Specifically, we are dedicated to having the right product assortment for our members, the right sourcing strategy and a deep, experienced set of leaders in place to positively impact this business.
Product Assortment: Our members and customers’ tastes change quickly and we need to better match their shopping behaviors and interest in fresh assortment by focusing on several key brands from Kmart and Sears. As part of this shift, will continue to reduce the number of overall brands and product categories while working to elevate the product. We are proud of our members’ response to the new styles of various brands, such as:
- At Sears: The popular Simply Styled and Simply Emma brands offer fantastic fabrics and price points such as camis ($3.99), cotton t-shirts ($5.99) and leggings ($7.99). Members are also attracted to the latest styles from Metaphor (particularly midi skirts and dresses), Canyon River Blues and Everlast.
- At Kmart: Attention, Jaclyn Smith, Adam Levine and Nicki Minaj offer great value and stylish designs that continue to be well received by our members.
Product Sourcing: It’s vital that we offer our members and customers the right fashion at the right time at the right price. We will continue to become less reliant on partner brands, and more focused on getting stylish apparel to our members and customers through greater control over our supply chain. By leveraging better sourcing and a direct business approach, we anticipate that that the resulting cost improvements will have a direct result on margins and the price that the member pays.
Leadership: We have a strong leadership team in place to support the apparel business’ transformation. These are leaders with significant merchandising, design, sourcing and operational experience at companies such as Abercrombie & Fitch, American Eagle, Hollister Co., Inditex, New Look, Primark and Victoria’s Secret. Additionally, we have leaders with successful, hands-on experience in turning around businesses such as KIABI and Pimkie.
We are starting to see traction in the changes we are making in the apparel business and we look forward to the year ahead.
David Pastrana is President, Apparel for Sears Holdings.
Cautionary Statement Regarding Forward-Looking Statements: Certain statements contained in this letter contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that use words and phrases such as the company “anticipates,” “believes,” “continue,” “expects,” “intends,” “plans,” “transform,” “going to be” and similar expressions or future or conditional verbs such as “will,” “may,” and “could” are generally forward-looking in nature and not historical facts and are intended to identify forward-looking statements. Forward-looking statements are subject to various risks, assumptions and uncertainties, including risks, uncertainties and factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.
