To lure holiday shoppers, Sears, Roebuck and Co. has dangled deals ranging from free $10 gift cards for early birds to $450 price tags on 20-inch liquid crystal display televisions originally $600.
But have the crowd-pleasing bargains been part of a grand plan by the Hoffman Estates-based retailer to rid itself of unwanted clothing inventory?
That's what one Wall Street analyst suggested Tuesday during a conference call about this year's uneven holiday season.
Daniel Barry of Merrill Lynch noted that Sears seems to be discounting more than many other retailers.
"My guess is that their sales are pretty good, even though they're doing it, in part, because their inventories are out of line," he said.
At the end of Sears' disappointing third quarter, its inventories were up 2.5 percent and its sales were down 2.4 percent, Barry said. Clothing sales fell more than 7 percent.
"So we think they're running all these promotions to get rid of excess apparel," Barry said.
At the time, Sears ratcheted down fourth-quarter sales expectations. Sears said it canceled some shipments to keep goods from piling up during the holidays. But the retailer cautioned that shipments, particularly apparel, would still exceed what Sears expected to sell in the fourth quarter.
"As a result, we're prepared to employ a clearance strategy on slower-moving items should it become necessary," said Glenn Richter, chief financial officer.
On Tuesday, Barry guessed it has become necessary, and even though Sears' holiday sales appear to be brisker than those of some other retailers, "they're giving the store away, so to speak," he said.
Heading into the holidays, Sears tripled the number of items on sale and gave out $10 gift cards. It worked, attracting crowds twice the size of last year's. Sears' sales on the day after Thanksgiving rose 25 percent over the same day a year ago, the company said Tuesday.
The following weekend, deals largely mirrored the kind offered a year ago. Last weekend, however, new doorbusters helped generate better traffic.
Spokesman Chris Brathwaite said that many of the retailer's departments are offering doorbusters and it's not designed to move excess clothing in particular.
"Particularly during the holidays, we want to win the Saturdays," Brathwaite said.
Apparel and accessories account for a quarter of Sears' sales, estimates Prudential Equity Group.
Separately, Sears said in a regulatory filing Tuesday that its 2005 long-term incentive plan, approved Dec. 8, will be canceled if its merger with Kmart Holding Corp. is consummated. Employees eligible for the incentives include Chief Executive Alan Lacy and his direct reports. No incentives have been granted this year.