If you recall, Sears reported fourth quarter 2011 losses of $2.4 billion and annual losses of $3.1 billion. Sears posted fourth quarter and annual earnings for 2012, and it looks like they’ve done a lot better.
In Q4 2012, Sears pulled in $12.3 billion in sales, leading to $489 million in losses. For the year, Sears saw $39.9 billion in revenue and a total loss of $930 million.
Thumbs up for keeping losses under $1 billion this year!
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4Q 2012 Announcement (via Sears)
Sears’s executives will have to cut costs and increase revenue if they are to further improve their situation in 2013.
I read through the chairman’s letter and found a few points I have mixed feelings about. (You can read the full letter here.)
As we look ahead into 2013, we will continue to transform into a Member-focused company with Integrated Retail playing a key role in helping deliver “wow” experiences to our Members. As a company, our mission is to serve, delight and engage our Members while they shop their way.
One of the areas we will be working on is to make SHOP YOUR WAY a much bigger part of the store experience. This includes pricing for Members only…
On our online sites, we will be working to further increase the amount of products in our Marketplace, and we plan on doing it in partnership with our Members.
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I shop at Sears.com a lot, since they carry a lot of the tools I want either exclusively or with better pricing, but it’s a pain to navigate. “Marketplace” items can be difficult to sort through, and the Sears.com shopping engine needs MAJOR updating. I also haven’t been “wowed” in some time.
In some ways the Craftsman brand has become less personal in recent years. No calendars with Craftsman club coupons on the back, no mailed Craftsman Club flyers, I haven’t even seen a 2013 catalog yet, and they never put together a 2012 holiday catalog.
In the short term, it doesn’t look like Sears will be spinning off their Craftsman brand, but it will still be interesting to see what happens. Craftsman is one of Sears’ biggest strengths and they might eventually spread the brands’ products beyond their few external retail partners (e.g. Ace Hardware and Costco).
Craftsman seems to have good leadership, but that won’t mean anything unless Sears can get their act together and stop losing money every year. While the situation much more complex than just looking at the bottom line, numbers do speak for themselves. This year’s numbers say Sears is at least heading in the right direction.
Mike U.
Nice to see Sears at least making some progress. 100% agree on the online experience…very little “wow.” Poor design, difficult to navigate, and product descriptions that are bereft of the most of the important details.
Also, it seems to me the many of the Marketplace items are sold at much better prices at other sites.
Overall, I don’t understand Sears’ strategy. Their online prices typically beat in-store prices handily. Example: G2 Nextec multitool currently $69.99 online, was $99.99 in my local Sears today. It’s like they are encouraging you to stay out of the store. Meanwhile, they have to pay employees, rent, and utilities to keep these stores open…and they wonder why they are losing money.
Seth
I agree with you Stuart: two of the most important things Sears can do to ensure its future success are to put the focus back on the customer and to revamp the way its physical stores and its website interact.
Discontinuing the tool catalog, halting mailed Craftsman Club flyers, moving to a digital distribution of sale info – it is a very modern approach but moving entirely towards this is very effectively making enemies of former friends. There are plenty of wrench-turning folk, both in the trades and DIY homeowners, that have not embraced the digital age and what Sears is doing is telling those folks that the company does not want their business. They do it with member-only pricing requiring an email to be a member, they do it by dropping support for unprofitable product lines that have active lifetime warranties, they do it by shrinking their selection to ‘high margin’ instead of ‘what the customer needs’.
Along the same lines, the company is failing to capitalize on what could be a much better customer experience online. Sears.com is filled with category-redirects, a horrible search parsing engine, and ‘marketplace’ suggestions that are incorrect, missing information, or at a inflated price. There is such potential in the distributed fulfillment network that the physical brick-and-mortar stores represent, yet inventory errors, customer service issues, and ‘online only’ vs ‘in-store’ pricing drive people away from sears and to amazon and other .coms.
If Sears would go out of their way to make *all* customers feel welcome, if they would have unilateral pricing online/instore, and if they would fix sears.com to have less marketplace and more good/relevant products, then I’m certain they could post a profit instead of losses.
Mati
The Sears website is in absolute need of a complete overhaul in my opinion. Similar to others, I haven’t been wowed by this. The search engine which should be simple, is overly complex to navigate through, the prices tend not have a equilibrium if they are in fact products sold by Sears and the images of the items are either non existent, outdated or even entirely incorrect.
One time I was looking for a socket bit and I was directed to a image of a patio furniture. But the issue doesn’t stop there, the product descriptions are also at times either incorrect, vague or you guessed it, non existent either.
Now I don’t blame them and agree that discontinuing product catalogs and advertisement flyers is a great business strategy as it’s a modern approach. However, their current website is quite challenging to navigate through so until some issues are addressed, they are actually potentially going to lose more business than gain. A completely paperless business strategy is often a good idea, but only if this can be implemented well.
I personally think that Sears should move away from the marketplace approach and focus on selling products that can be bought at a Sears shop. I understand they want to be similar to Amazon with selling a large amount of products online, but the average person who goes to Sears doesn’t go there for patio furniture, at least not through the online Sears website.
jesse
Let me add my voice to the chorus that says sears.com is dreadful. It’s absolutely dreadful, and Sears either does not know or does not care. I have nothing good to say about it. It must be one of the worst websites among large online retailers. Maybe they should let Amazon handle their internet business.
For me personally it’s a terrible mistake to eliminate the Craftsman print catalog, which I can carry around without worrying about battery drain, flip through it any way I want, circle items with a pen, scribble notes anywhere esp. on the back cover, dog-ear a page or rip one out, check the index without getting a host of annoying irrelevant search hits, etc. The print version would always be my first choice for Craftsman info.
And they made no friends with me for their Christmas Bionic Wrench knockoff fiasco. I haven’t forgotten that one.
Coach James
My only “wow” experience with Sears is “Wow, this website is horrible!”. Even Harbor Freight has a better website than Sears. I don’t really get the Market Place idea as they cannot beat Amazon at that game. Sears started getting significantly less money from my friends and me when they did away with their “10% of any Craftsman Item plus other sale prices” during Craftsman Club Days.
Then the club flyers began to carry the same things each month and there was no discount on anything not in the flyer. Plus the flyers seemed to be hit and miss. I signed up my wife, both kids and myself and it was rare that any of us got a flyer during club days.
I thought the C-man Club was gone as my local Sears staff told me it was being done away with when they started the rewards program, but I see the C-man Club being mentioned as still existing.
Sears has the appearance of a company with no clear vision of what the company is supposed to be or what market they are targeting.
charles
Sears just closed their store closest to me. I bought $2500 in tires from them over the last ten years, at least that much in Craftsman tools.
Keep shifting to “made in *” (insert random country here) products, closing stores, and continue the incredibly bad online experience and I’ll start buying from Lowes or Theisen’s, neither of which looks to be in any danger of closing stores or going bankrupt. I’ve been a Craftsman buyer all my life, and I’m beginning to think Sears is taking brand loyalty for granted. There are plenty of other “made in USA” tool brands available.