Sears, Roebuck and Co., which until now has announced plans for only five freestanding Sears Grand discount stores, now believes its new off-mall format has the potential for up to 500 locations, an executive at the Hoffman Estates-based department-store chain said Wednesday.
Bill White, general manager for full-line stores, told the National Association of Retired Sears Employees that the Sears Grand format is exceeding sales expectations, with shoppers visiting more frequently and spending more each visit than they do at Sears' traditional stores.
"We believe there's the potential for up to 500 of these stores across the country," White told about 60 retirees at the Stonegate Conference and Banquet Centre in Hoffman Estates. "We certainly have the cash to invest in the expansion now."
About 80 percent of Sears Grand consists of products sold in the mall stores, while the rest of the product line includes everything from milk to toys to magazines to better compete against more vibrant retailers like Wal-Mart. The convenience items also are selling well, White said.
The retailer has developed two Sears Grands so far, including one in Gurnee. Three more will open by the end of next year. Sears, however, has been publicly circumspect about further expansion.
Sears has 870 mall-based stores, a number that has remained stagnant for about 15 years. Some existing stores could be converted to Sears Grands, but the company wants to expand its store base, White said. Home Depot, Lowe's and Wal-Mart all have been opening hundreds of stores a year.
Sears has said that Sears Grand profits aren't yet up to snuff, but the cost structure should improve if and when Sears opens more Sears Grand stores and is able to enjoy economies of scale from the format's suppliers.
"Negotiating with two stores is different than negotiating with 100 stores," White explained.
Late Wednesday, told of White's comment in response to a retiree's question, Sears spokesman Chris Brathwaite said Sears was optimistic about the format but has "no definitive plans about a particular number of Sears Grand."Copyright © 2014, Los Angeles Times