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Sears Rethinks Its Apparel Mix

Upgraded assortments and more targeted merchandising are fueling growth in Sears, Roebuck & Co.'s sportswear business.

Byline: SOPHY FEARNLEY-WHITTINGSTALL


CHICAGO -- Upgraded assortments, including a greater emphasis on branded apparel, and more targeted merchandising are fueling growth in Sears, Roebuck & Co.'s sportswear business.


According to Robert Mettler, president of the Apparel Group, and Dorrit Bern, group vice president of women's apparel and home fashions, sportswear is growing by a "substantial double-digit percentage" on a same-store basis. In women's apparel, it is superseded only by Sears's juniors business, they said.


While Mettler and Bern declined to give precise percentage increases in misses' sportswear or juniors, sources recently estimated juniors was growing by as much as 30 percent.


Key strategic changes have included increasing the proportion of career apparel to 40 percent of total sportswear from 25 percent three years ago, and increasing the proportion of branded apparel to about 70 percent, compared with about 20 percent three years ago, Mettler and Bern said in an interview at the chain's headquarters in Hoffman Estates, Ill.


Overall, Sears has said apparel accounts for 28 percent of its Sears Merchandise Group's revenues, which were $26.3 billion in 1993. The retailer aims to build this to 40 percent as it remakes itself as the department store for Middle America.


As Mettler explained, Sears has steadily been rounding out its sportswear assortments to include more fashion, better quality and higher price points. For example, two-piece washed silk outfits retail from $65 to $70.


But Mettler is wary of saying the retailer is going upscale; rather, it's expanding its offerings to meet the demands of its customers. "We think value is a very important equation, but we're not afraid of adding some price points," Mettler said.


A recent visit to Sears at Oakbrook Center, an upscale mall in a suburb of Chicago, bore this out. For example, there was a good selection of pure silk shells by Anna and Frank for $19.99, but close by for the more price-conscious customer was an almost identical polyester item by Lauren Lee at $9.99.


"We've moved away from the basic commodity, predictable items and moved into the fashion business," Bern said. "The customer is willing to pay more, and she understands quality and value."


They cited as an example a linen jacket that two years ago would have been unlined and sold at $19.99. That item is now lined and priced at $29.99. "As soon as we traded up the product, [the customer] told us she didn't want the $19.99 one," Bern added.


Price is no longer the only issue: If an item has the right look and quality, the chain will carry it. "We wouldn't worry about carrying a $60 sweater, if that's fashion," Bern said.


As Sears rounds out its sportswear assortments, career apparel is also growing in importance. "Our strategy has been to go into a more balanced business so we can wardrobe casual and career," Bern said, noting that 80 percent of women in America work.


With the increased ratio of career to casual, the chain is finding that blouses are currently posting double-digit sales increases and career styles, such as woven tops, are outselling casual knit ones (excluding T-shirts), Mettler said.


However, overall casual dressing outperforms career because knits have been very strong, he said.


Other areas doing well in sportswear include special sizes, which Bern said had seen "explosive growth," and two-piece dressing. A top and skort, in rayon for career, cotton for casual, ranges in price from $19.99 to $39.99, Bern said.


Discussing the hefty expansion in brands, Bern said, "When we decided strategically to build into [fashion], we had to go to the people who knew and understood it," she said.


While Bern declined to discuss brands, some of the most dominant names in the women's sportswear department recently included Modiano, Tan Say, Villager, Lee and Gloria Vanderbilt.


But Sears isn't neglecting its private label business; a new organization is being developed within the chain, as reported, to develop a stronger private label business.


"We didn't have a well-coordinated branded program," Mettler said. "We weren't consistent." Computer-aided design is one of the tools the new department will use to bolster its private label assortments.


Much of the chain's recent success with apparel has resulted from better targeting its merchandise to meet individual store needs. For example, Bern explained, stores in the South, with its warmer climate, have already moved successfully into early fall colors, while the northern part of the country moved into that palette in late June.


Various ethnic groups are also being targeted. Sears has identified the Hispanic population -- the fastest growing ethnic group in the nation -- as a key market.


This section of the population tends to wear smaller sizes and brighter colors, and is also faster to pick up on fashion trends and novelty items, so Sears will ship that merchandise first to stores in areas with a high concentration of Hispanics, Mettler said.


The importance of the Hispanic market is reflected in a Spanish-language magazine published by Sears called Nuestra Gente. The free magazine, which Sears began publishing in May 1993 and is distributed to Hispanic households across the United States, has increased its circulation from 100,000 initially to 1.5 million.


The magazine is heavy on Sears ads, which features apparel on Latino models, but also takes advertisers from non-competitive categories, such as AT&T.


Another aspect of Sears sportswear strategy is an increased effort to keep a flow of new goods to tempt customers, Mettler said.


Despite its emphasis on fashion, sportswear at Sears is still merchandised by classification. However, Mettler is determined the store not be lumped with off-price stores with their seas of racks of single items.

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