Will Kmart walk away a winner with Sears deal?
By Bruce Horovitz, USA TODAY
Kmart (KMRT) has just pulled the rough equivalent of a refrigerator out of its hat.
Make that a Kenmore brand refrigerator from Sears (S). And maybe some Craftsman tools. And some DieHard batteries, too.
All this came to be when Kmart yes, the same Kmart that almost went belly up less than two years ago announced plans Wednesday to purchase Sears Roebuck for $11 billion.
No. 3 U.S. retailer, after Wal-Mart and Home Depot
Expected annual revenue: $55 billion
Approximate number of retail stores: 3,500
Headquarters: Hoffman Estates, Ill.
Operations: Both Sears and Kmart businesses will operate under their current brand names
Sources: Reuters, Associated Press
The deal would create the nation's No. 3 retailer, behind No. 1 Wal-Mart and No. 2 Home Depot.
While it's yet to be decided which Sears and Kmart brands will be sold where, there's plenty of speculation that most of the two retailers' major exclusive lines eventually will be sold at all locations of both chains.
Welcome to 21st century retailing at its most cutthroat. The combined chains will now try to squeeze better prices out of suppliers. They'll whittle distribution costs. They'll shutter poor-performing stores. They'll lay off workers whose duties become redundant. And they'll be able to convert poorly performing Kmarts into Sears' newly created, off-mall Sears Grand stores, which have shown promising results.
But can Kmart and Sears together work enough magic to pull in new customers? And can they together establish two viable store brands that stand for something distinctive in consumers' minds?http://www.usatoday.com/money/indust...rs-cover_x.htm