Sears announced today that it will be joining the likes of Toys “R” Us, Bon-Ton, and Mattress Firm on the list of retailers that have filed for bankruptcy in 2018, with a looming $134 million debt over its head. A total of 142 stores will close, although the retailer hopes to avoid liquidation and instead reorganize debts or sell off parts of the company. Sears could also leverage its digital assets, using online and mobile platforms to facilitate e-commerce, a strategy that has contributed to strong rankings in Gartner L2’s Digital IQ Index: Department Stores and Digital IQ Index: Big Box.

Department stores

While Sears was able to maintain site traffic comparable to peers such as Kohl’s, JCPenney, and Macy’s, Gartner L2’s study finds that the retailer under-indexes in share of apparel revenue, which is dominated by Walmart and Amazon. For years, Sears warded off its fate by selling off its private label brands like Lands End as well as prime retail locations to cushion its mounting debt. While several department stores followed with their own momentum of store closures, winners have still been able to conduct drive to store initiatives: Kohl’s recent partnerships with Aldi and Amazon and Macy’s acquisition of Story and pilot introduction of The Market exemplify how stores can leverage their physical locations to create unique experiences that drive store traffic.

On a similar note, big box players and department stores have both worked to streamline inventory or the past years to combat fast fashion players, while also heavily investing in expanding their own private label brands. JCPenney has taken up the tactic of introducing new private label lines but also reviving the old by partnering with teen influencers Brooklyn & Bailey for a revamp on their long standing private label Arizona. This is a trend amongst others as well (i.e. Nordstrom + Something Navy, Target + Chrissy Teigan) and aids in brand relevance.

Sears, which largely appears inactive on major social media platforms, has forgone the approach to target a large segment of shoppers who discover relevant brands online and through social media. With its valuable properties and brands sold off, Sears lacked a competitive strategy to bring customers to both online and in-person storefronts, leading to a disproportionate share of apparel revenue and an inability to fight off debt.  

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