New Sears team has a plan

Recognizing role in Canada key to turnaround

If a new management team is one ingredient required for a turnaround then Sears Canada —a company with operations in Canada for about 60 years — is on the right path.

Sears, which has a national network of corporate stores, hometown stores, and catalogue and online pick up stores, has recently named a new team: In July Brandon Stranzl was made executive chairman, while last month Carrie Kirkman was named president and chief merchant.

The two have different backgrounds: Stranzl is an American with considerable experience in the finance and investment sectors while Kirkman ( born in Australia before returning to Canada as a teenager) is a veteran retailer with stops at Nine West and the Jones Apparel Group.

The goal of the two key executives is a management structure that “maximizes collaboration and entrepreneurial speed of execution.” The goal is to make Sears profitable.

Notes Kirkman: “We have to ensure we are building a strategy and a vision that is sustainable, ( of developing) solid building blocks that will drive a successful Sears business for many years. That (vision) has a hundred pieces under it that have to happen.”

That vision starts with the role Sears has played in Canada. “Before you solidify anything dramatic you need a true sense of what this brand means in Canada,” said Kirkman including the important role the stores play in their local communities, particularly the charitable involvement. ( For instance, it has had an unbroken, 50-plus year association with the Boys & Girls Clubs.)

“Our j ob is to connect to our customers, to understand their lives and values. Everybody is selling stuff. You are not going to win flogging stuff,” said Kirkman, adding Canadian family values are also Sears’ values.

“Our values align to their values and I don’t know we have celebrated that in recent years. That is a starting point of a relationship … and you have to build your business that respects that,” she said, noting “we need to do a better job at connecting in more ways with our customer.”

The numbers show the need: revenue was off by eight per cent in the recent nine months compared with the same period last year.

Adds Stranzl: “What’s fundamental to the company’s history is that Sears got its customers in the huge life events. You bought a home, you were raising a family, and you went to the Sears store. Over time this company has lost sight of that connection. We need to win back our customers on some of other products,” he said, noting that Sears has about one-quarter of the home appliance market. “We can win in the soft side of the business. Our customers want us back.”

Ensuring Sears has the adequate balance sheet is a key part of Stranzl’s work: While losses don’t help, the company’s ongoing efforts to monetize some of its assets does. “We have to fix the company and it’s going to take some time,” he said.

Analysts Keith Howlett of Desjardins Securities rates it a sell with an $8.50 target while Perry Caicco from CIBC World Markets rates it a sector perform with an $11 target.