Carrie Kirkman, president and chief merchant, Sears Canada, poses in a Toronto location on Monday, November 2, 2015.Darren Calabrese/The Globe and Mail
For Carrie Kirkman, the new president and chief merchant of Sears Canada Inc., it's all about Amy.
Amy is Ms. Kirkman's prototypical Sears customer. She is 40 years old and has one child and another on the way. She's time-starved and looking for reasonably priced fashions.
"That's our girl," Ms. Kirkman, stylishly dressed in black, including leather pants and high-heeled suede boots, said in an interview Monday. It was her first day on the job and one day before the company was to unveil her appointment. A fashion industry veteran, she was previously president of the profitable Jones Group Canada (despite that company's U.S. troubles) and a former Hudson's Bay Co. and Liz Claiborne executive.
The problem Ms. Kirkman faces at Sears is that too few of its current customers are in Amy's demographic (35 to 50) and too many of them are in the cohort of "Linda." Linda is Sears' prototypical over-50 customer with two grown children and an ingrained Sears shopping habit.
Now Ms. Kirkman, 52, needs to win over more women of Amy's ilk and still keep Linda happy with a growing array of high-margin apparel and home decor items – rather than low-margin appliances – to help turn around Sears' flagging fortunes.
The challenge is considerable. Over the past several years, amid shrinking sales, Sears has largely counted on asset sales – especially store lease divestitures – to shore up its financial results.
Perry Caicco, a retail analyst at CIBC World Markets, said in September the retailer's value is essentially in its real estate: "In our calculation, the retail operation is basically worthless at this point."
Still, Sears is slowly showing signs of progress.
In its third quarter, for which results are expected to be released Dec. 3, same-store sales at "core" outlets (including its 95 department stores and 40 home stores) were positive, company executives revealed Monday.
Those overall sales at stores open a year or more, and considered a key retail measure, have been negative for the past seven quarters.
Sears' same-store sales already started to improve in its second quarter as the company sold off aged inventory at markdowns and brought in fresh merchandise for baby boomers such as Linda and, now, increasingly, for Amy and her younger generation.
There's another key signal the retailer may now be serious in wooing back customers: Brandon Stranzl, 41, executive chairman of Sears Canada, has moved here with his wife and eight-year-old twins from Greenwich, Conn., to take a hands-on role in the business.
Mr. Stranzl is a close associate of Edward Lampert, whose U.S. hedge fund is a key shareholder of Sears Canada. Mr. Lampert is also chief executive officer of Sears Holdings Corp. of Hoffman Estates, Ill., which has also struggled.
Mr. Stranzl said on Monday that Sears is no longer searching for another CEO for Sears Canada; the company has had four CEOs in about five years. (The former one commuted from Warwick, N.Y.)
With Mr. Stranzl's finance background and Ms. Kirkman's merchandising strength, they will together tackle the Sears challenge, he said.
"We need to accelerate the sales growth and accelerate the transformation," Mr. Stranzl, dressed casually in a hoodie and khakis, said in an interview.
Ms. Kirkman is focusing on "the softer side of Sears," which is a marketing slogan it used more than 15 years ago when it made gains in drawing more women to its fashions and home accessories.
To entice more "Main Street" shoppers, she plans to focus on mid-priced brands and tailor offerings in each region and store to local communities, such as more rain wear rather than heavy parkas for Vancouver winters, she said. In the Maritimes, consumers like navy blue clothing and "can never get too much navy."
She will place lines such as Jessica Simpson and Robert Rodriguez more prominently so as to cater to younger women, she said. "Right now I can't say that's obvious if you walk in our stores."
And she will borrow from a "storytelling and pinball" store model: Similar to IKEA, Sears will put benches, racks and mannequins in a more maze-like formation to force shoppers to browse through displays rather than speed through merchandise racks in straight rows, she said.
Mr. Stranzl said he wants to make shopping more "sexy," similar to how Apple pulls in customers with its products.
And while industry observers argue the mid-market is being overtaken by discount and luxury retailers, Ms. Kirkman counters the mainstream customer is underserved. It helps that U.S. retailer Target Corp. left this market this year, opening up more potential business for Sears, she added.
While appliances are still a key seller for Sears, their profit margins have been sliced in about half – to the mid-20-per-cent range – in the past decade. Apparel and home accessories can generate twice those margins, company officials said.
Sears' research found it needed to attract younger shoppers, Mr. Stranzl said.
Currently, 55 per cent of customers are 50- to 75-year-old women, while only 18 per cent are women younger than 50. Women are important partly because they buy many goods for men.
This holiday season, Ms. Kirkman will try to lure them back by touting the Sears Wish Book catalogue, harking back to its heritage.