Sears Holding Corporation Proposal Report

In: Business and Management

Submitted By obisakin1
Words 944
Pages 4
We are proposing that Sears Holding Corporation (SHC) divest its subsidiary Kmart Corp. Sears was once a retail giant that offered home appliances, clothing, and hardware. Kmart Corporation acquired Sears, Roebuck and Co in 2005 in the optic of accelerating their process of expansion as Sears targeted several Kmart locations. The merger of those corporations was also made to facilitate the access of branded products to their respective customers. They kept their own specific brands to continue focusing on their customers. By sharing their intelligence data they wanted to improve their revenues and minimize their overall annual costs. However now because of the recession, Sears is becoming less viable as time goes on and it stays alive by shutting down over a hundred storefronts across the nation. Kmart wanted to compete with large discount retailers like Wal-Mart and Target so they acquired Sears which now seems to be their downfall. Kmart sales have gone down tremendously because it has not successfully anticipated consumers’ needs. The immediate response of the merger was a decline of 84% in income and later on a net of $170 million loss during the first quarter of 2011. Even if the company’s profit has been positive this year, it seems that it is not at its fullest capacity. Sears’s problem is that it needs to focus more on their own identity and help its own brand image. By dropping Kmart, they can revamp their old fashioned image and give consumers what they want. By focusing on these brands, Sears can increase revenue and get back to achieving retail supremacy.
Background Information
Sears, Roebuck & Co merged with Kmart Corporation in the spring of 2005. The reasons for the merger included synergy and cost savings. The corporation planned to remain as individual stores while merging their products, real estate, culture and ideas. The corporation is…...

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