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Sears/Kmart hybrid planned for St. Petersburg store

By MARK ALBRIGHT
Published February 8, 2005

Joe Boxer, Jaclyn Smith and Martha Stewart move over. Craftsman tools, Kenmore appliances and Diehard batteries are about to share a Kmart.

A north St. Petersburg store is being remodeled into one of the first Sears experiments with a hybrid discount store called Sears Essentials.

Located at 9500 Martin Luther King St. N, the Kmart is among the first 25 tests nationally of a new-fangled Sears stocked with a blend of Kmart goods and Sears top-selling branded products.

The experiment is a critical underpinning of hedge fund manager and Kmart Holdings Corp. Chairman Edward Lempert's vision of buying Sears for $11-billion to re-invigorate Kmart's vast real estate holdings.

Sears, which is now limited almost exclusively to huge regional mall stores, has been losing market share for years to more nimble big box chains such as Best Buy, Home Depot and Wal-Mart. Now it sees its survival in getting closer to where its competitors are and its customers live. Part of this change involves shifting more of its stores to open air shopping centers such as those favored by discounters like Kmart, Wal-Mart and Target.

In fact, the new St. Petersburg Sears will be just a few blocks from a Target and a few miles from one of the most prosperous Wal-Mart Supercenters in the country. Target and Wal-Mart already are generating enough business there to have announced plans for their second discount stores in the same general neighborhood.

Sears, which acquired 50 Kmarts and six empty Wal-Mart discount stores last November, on Tuesday said about half of them will be converted to Sears Essentials by spring. Five of the stores are in densely populated neighborhoods in Florida.

"This new store format enables Sears to grow its brand off-mall and better able to meet the everyday needs of our customers," said Alan Lacy, chairman and CEO of Sears, Roebuck & Co. who termed the move the beginning of the most aggressive growth initiative in company history.

A few years ago Sears was just as bullish about the Great Indoors, its upscale version of a Home Depot, which has yet to become profitable after a handful of stores were opened.

Sears optimism this time is bouyed by the success of the first few experimental Sears Grand stores in 2004. Those are full-line Sears stores that fit in open air shopping centers, but include some convenience foods and household products more familiar to discount storse.

The Sears Essentials remodelings will mostly be cosmetic. Most of the stock will remain Kmart merchandise including the pharmacy counter which will become Sears' first venture in prescription drugs.

Store features will revolve around quick trips for shoppers. The cash registers will be at the exits and include self-checkout. Stock will include garden center supplies, pantry food items, health and beauty products. The Sears brands will offer customers a trade-up opportunity not available at Target or Wal-Mart.

"We will customize a best-of-both worlds blend of merchandise to the individual neighborhood, but the decisions of exactly which brands we choose will be made after the merger with Kmart is closed," said Sears spokeswoman Corinne Gudovic. "These stores, however, will remain Sears Essentials even if the merger does not go through."

The Sears/Kmart deal is expected to be finalized next month.

The roughly 100 employees at the St. Petersburg store have been notified they will be Sears employees. The store will remain open while remodeling work is underway. The transformation into a Sears Essentials will be done by spring.

-- Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

[Last modified February 8, 2005, 18:52:02]