Can Sears Holdings Latest Strategy Allow the Corporation to Become a Competitor in Retail Once Again - Essay Example

Commentary on: Can Sears Holdings Latest Strategy Allow the Corporation to Become a Competitor in Retail Once Again? I certify this written report to be an authentic and unique work, with proper credit shown and recorded where ideas other my own have been used. I understand the penalty of plagiarism and certify this to be my own work and effort. Name Date Content Introduction……………………………………………………………………………………….3 ANSOFF Matrix…………………………………………………………………………………..4 SWOT Analysis…………………………………………………………………………………...6 Conclusion/Summary……………………………………………………………………………...8 Bibliography…………………………………………………………………………………......11 Article 1………………………………………………………………………………………….13 Article 2………………………………………………………………………………………….18 Article 3………………………………………………………………………………………….21 Article 4………………………………………………………………………………………….24 Introduction/Background Sears Holdings has been on extremely difficult ground especially since the merger with department store Kmart in 2004. Though Kmart and Sears each generated large profit shares they were both department stores weakening among the competition. The acquisition looked good to Sears Holding CEO Lambert1, who thought that Kmart could possibly make a comeback by showcasing Sears’ exclusive product brand Craftsman. This plan was woefully inadequate and profit has decreased the preceding 19 quarters consecutively. Capital and store updates are the only possible solution that analysts’ feel could make a difference in the demise of both chains. Sears is now competing with mega giant discount chain Wal-Mart, stylish and up to date Target and electronic giant Best Buy. Though Sears was once the catalog choice of America it has failed in building solid ground in the online retail market where others have had success (Munarriz). The following documents will be used in this commentary: 1. Sears Holding Press Release- Sears Holdings Provides Updates 2. Bloomberg Business Week- Sears adds ex-Brookstone CEO to head merchandising 3. Bloomberg Business Week- Lampert Fund Cuts AutoZone Stake as Clients Pull Money Amid Sears Losses 4. Small Cap Network- Sears realizes future is Mobile Marketing, not Bricks and Mortar (BKS, SHLD, MFON) Tools used to evaluate and analyze Sears Holdings and discuss possible solutions for the company will be SWOT analysis and the corporate ANSOFF matrix. ANSOFF Matrix The ANSOFF matrix is used to generate strategic directions using product market options, possible growth opportunities are noted and explored and presented to reveal four distinct strategies2. ANSOFF focuses on using marketing strategy to achieve growth though it does not provide solutions or suggestion of how this strategy should be implemented, which requires further analysis. Sears Holdings has recently acquired a new chief merchandising officer, Ron Boire, who has previously been responsible for the success of Brookstone while also being utilized at Best Buy and Toy R Us (DInnocenzio). Sears plans to use Boires’ expertise in mobile and online marketing and his experience in merchandising to completely transform and update retail store location. Market Penetration Offer exclusive products, name brand recognition Target pricing and promotions Market Development With the acquisition of Boire, online and mobile marketing should be expanded with increased visibility Product Development Innovate and enhance existing brand names such as Craftsman and Kenmore, Kardashian Kollection Diversification Research market items to develop improved and new products With Sears being such a household name for so many years it is possible that with diversification and new market development along with the maintaining of current customers through the use of reward programs and targeted marketing that Sears Holdings can compete with the larger chain retail stores. Enhancing their existing name brands which are exclusive can draw in new customers, establishing a new base from which to create repeat customers. Targeting online and mobile shoppers and exploiting factors such as convenience, reliable shipping and delivery and true to life online product descriptions and photos can create a place for Sears Holdings in the online shopping arena. Sears department stores developed a new a successful clothing line in 2011, Kardashian Kollections. This line should be extended though I don’t think it should also be offered at Kmart outlets as the Craftsman tools did not prove to offer much benefit when marketed at both locations. Consumers like exclusiveness in many of their products and like to feel that they are buying a product that isn’t sold everywhere. It is especially important that if Sears has profitable, successful and valuable brand names that they work to keep these brands successful through innovation, enhancement, and market study and comparison to remain up to date and current with trends and in the public’s notice. SWOT Analysis Strengths Sears and Kmart are household, well-known names Name brand recognition with products such as Kenmore, Craftsman, and Kardashion Pricing and cost savings power evident in AutoNation and AutoZone parts Weaknesses Little focus on locations and ‘shopping’ experience Opportunity’s Ron Boire brings experience, expertise and success in online and mobile marketing as well as product enhancement and innovation Stores with higher performance will be focused on while those that are marginal are low performers will be closed Threats Big name competitors such as Wal-Mart, Target Retail stores with strong online marketing strength Poor inventory management It is possible that Sears, through the focusing of the retail locations with the most strength and using strategy to carefully choose the weakest to close that Sears can maintain profitability in 2012. New key employees can help strengthen the organizations online and mobile presence, bringing fresh and innovative ideas to Kmart and Sears operations. Lampert has sold many shares of the successful AutoNation in order to maintain solvency; this action is not one that is going to promote long term success. AutoNation has remained profitable and successful and this should be exploited and enhanced however possible. Closing locations will decrease cost to Sears if the location was not profitable but will not contribute in any way to a long term plan of regaining success. It’s going to very difficult for Sears to complete with Wal-Mart and other retail stores if there is not revamping and updated of their stores. . Sears Holdings needs to put complete attention into strengthening customer relationships. . Conclusion/ Summary Sears Holdings released a press release in December, 2011 3recognizing the fact that their corporation needs to make changes in order to remain profitable in 2012. Kmart declines were attributed to electronics, layaway and apparel while Sears’s department stores declines were more than half in consumer electronics and the remainder in appliances. Sears Holdings needs to strengthen the image of their name brand appliances, exclusive to Sears, using enhancement and innovation to bring them up to date and in line with the latest on the market Kmart could possibly benefit from the introduction of Sears Holdings Kardashian line though this might not work so well; consumers like purchasing clothing items that are exclusive and brand name and not found at discount chains Sears and Kmart should focus on targeted advertising, sales promotions and discounts such as coupons Customer reward programs, buying incentives and VIP programs should be implemented to retain loyal and repeat customers Ongoing expenses will be reduced as Sears continues to take losses on big ticket items. 100-120 stores plan to close generating 140-1704 million in cash revenue with further cash revenue being generated when these building or sold or subleased. Plans are also included to strengthen inventory management. Though these moves will generate immediate cash it will quickly be absorbed by the costs of a failing business if changes and turn around aren’t established, producing temporary solvency at best Cash and funds at this point should be focused on improving the retail experience, strengthening those stores that are successful- updated merchandise floor plans and displays, the addition of product lines, and working towards a ‘shopping experience’ should be goals Evaluation of stores should be undertaken by an outside agency designed to show areas in need of improvement to bring stores to a level that is competitive with others Better asset management will keep the corporations costs down as much as possible- upgrading inventory management systems using market research in order to determine the most effective and successful technology that is available should be considered With the addition of Ron Boire Sears Holdings plans to expand and upgrade their mobile and online retail presence. This is a great idea- more and more Americans are doing their shopping from home- efforts in targeting these consumers to shop with Kmart and Sears online could increase sales and profit without increases in costs Though the idea is good at this point it may not be possible for Sears to regain competitive ground in this arena No net operating losses have occurred thus far due to tax carry forwards and other tax benefits and there are tax benefits available for future use if income is generated. Without a profitability these tax benefits are of no use and will not be able to be realized Lampert has used AutoZone and AutoNation shares to meet year end redemptions, payment in kind. This leaves Lampert focusing primarily on Sears Holdings. This should be the case-Sears Holdings has been able to remain solvent and meet debt Sears Holdings has good strong plans in theory in order to regain profitability and to remain in business and solvent. If these plans are carried out successfully they are likely to be able to remain in competition with other big names but without some major changes they will face more and more store closures, placing them less and less in the consumer’s vision. Without some serious spending on their part in order to completely update their image, product line, marketing strategy, store fronts and customer base they are more than likely going to continue to struggle. The size of the corporation and available assets means that they will be able to exist despite not realizing commercial success. It is likely that Sears Holding will remain solvent, being able to marginally meet debt through store closures, fixed costs, inventory management, and tax benefits; however a return to profitability is not likely without serious corporate changes which will take corporate dollars. Bibliography DInnocenzio, Anne, and Michelle Chapman. "Sears Adds Ex-Brookstone CEO to Head Merchandising - BusinessWeek." Businessweek - Business News, Stock Market & Financial Advice. Business Week, 03 Jan. 2012. Web. 06 Jan. 2012. . Sears Holdings Public Relations. "Sears Holdings Press Releases." Sears Holdings Corporation - Corporate Website. 27 Dec. 2011. Web. 06 Jan. 2012. . Munarriz, Rick Aristotle. "Why Sears Will Never Be Great Again - DailyFinance." Business News, Stock Quotes, Investment Advice - DailyFinance. 08 Dec. 2011. Web. 06 Jan. 2012. . Weiss, Miles, and Katherine Burton. "Lampert Fund Cuts AutoZone Stake as Clients Pull Money Amid Sears Losses - Bloomberg." Bloomberg - Business & Financial News, Breaking News Headlines. 04 Jan. 2012. Web. 06 Jan. 2012. . Yates, Jonathan. "Sears Realizes Future Is Mobile Marketing, Not Bricks and Mortar (BKS, SHLD, MFON) : Small Stocks Radar." Small Cap Stocks and Penny Stocks For Big Returns - SmallCap Network. 06 Jan. 2012. Web. 07 Jan. 2012. . Richardson, M., & Evans, C. (2007). Strategy in Action Applying Ansoffs Matrix. Manager: British Journal Of Administrative Management, (59), i-iii. Article 1 Press Release Sears Holdings Provides Update Dec 27, 2011 HOFFMAN ESTATES, Ill., Dec. 27, 2011 /PRNewswire/ -- Sears Holdings Corporation ("Holdings," "we," "us," "our," or the "Company") (Nasdaq: SHLD) today is providing an update on its quarter-to-date performance and planned actions to improve and accelerate the transformation of its business. Comparable store sales for the eight-week ("QTD") and year-to-date ("YTD") periods ended December 25, 2011 for its Kmart and Sears stores are as follows: QTD YTD Kmart -4.4% -1.8% Sears Domestic -6.0% -3.3% Total -5.2% -2.6% Kmarts quarter-to-date comparable store sales decline reflects decreases in the consumer electronics and apparel categories and lower layaway sales. Sears Domestics quarter-to-date sales decline was primarily driven by the consumer electronics and home appliance categories, with more than half of the decline in Sears Domestic occurring in consumer electronics. Sears apparel sales were flat and Lands End in Sears stores was up mid-single digits. The combination of lower sales and continued margin pressure coupled with expense increases has led to a decline in our Adjusted EBITDA. Accordingly, we expect that our fourth quarter consolidated Adjusted EBITDA will be less than half of last years amount. For reference, last year we generated $933 million of Adjusted EBITDA in the fourth quarter ($795 million domestically and $138 million in Canada). Due to our performance in 2011 we expect that we will record in the fourth quarter a non-cash charge related to a valuation allowance on certain deferred tax assets of $1.6 to $1.8 billion. Although a valuation adjustment is recognized on these deferred tax assets, no economic loss has occurred as the underlying net operating loss carryforwards and other tax benefits remain available to reduce future taxes to the extent income is generated. Further, we may recognize in the fourth quarter an impairment charge on some goodwill balances for as much as $0.6 billion. These charges would be non-cash and combined are estimated to be between $1.6 and $2.4 billion. "Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model. These actions will better enable us to focus our investments on serving our customers and members through integrated retail - at the store, online and in the home," said Chief Executive Officer Lou DAmbrosio. Specific actions which we plan to take include: Close 100 to 120 Kmart and Sears Full-line stores. We expect these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and we expect to generate additional cash proceeds from the sale or sublease of the related real estate. Further, we intend to optimize the space allocation based on category performance in certain stores. Final determination of the stores to be closed has not yet been made. The list of stores closing will be posted at www.searsmedia.com when final determination is made. Excluding the effect of store closures, we currently expect to reduce 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter as a result of cost decreases in apparel, tighter buys and a lower inventory position at the beginning of the fiscal year. Focus on improving gross profit dollars through better inventory management and more targeted pricing and promotion. Reduce our fixed costs by $100 to $200 million. In addition to the specific store closures listed above, we will carefully evaluate store performance going forward and act opportunistically to recognize value from poor performing stores as circumstances allow. While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment. We intend to accentuate our focus and resources to our better performing stores with the goal of converting their customer experience into a world-class integrated retail experience. We currently expect the store closure and inventory reduction actions to reduce peak inventory in 2012 by $500 to $580 million and reduce our peak borrowing need by $300 to $350 million in 2012 from levels that may have resulted in 2012 without such actions. At December 23rd, we had $483 million of borrowings outstanding on our domestic revolving credit facility leaving us with over $2.9 billion of availability on our revolving credit facilities ($2.1 billion on our domestic facility and $0.8 billion on our Canadian facility). There were no borrowings outstanding last year at this time. During the fourth quarter through December 23, 2011, we have not repurchased any of our common shares under our share repurchase program. As of December 23, 2011, we had remaining authorization to repurchase $524 million of common shares under the previously approved programs. Fourth Quarter Earnings Release The company currently plans to release financial results for its fiscal 2011 fourth quarter and full year on or about February 23, 2012, before the market opens. Forward-Looking Statements Results are preliminary and unaudited. This press release contains forward-looking statements about our expectations for the fourth quarter of fiscal 2011. Forward-looking statements contained in this press release also include statements about the expected range of the valuation allowance on certain deferred tax assets, the possible recognition of an impairment on some goodwill balances, various initiatives to reduce expenses, adjust our asset base, generate cash and transform our business model and the impact of such initiatives. Forward-looking statements are subject to risks and uncertainties that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: our ability to offer merchandise and services that our customers want, including our proprietary brand products; our ability to successfully implement various initiatives, including reducing expenses, successfully closing stores, including liquidating related inventory at expected mark-down levels and selling or subleasing such stores on acceptable terms, improving inventory management and other capabilities; customer acceptance of our integrated retail model; impairment charges for goodwill and intangible assets or fixed-asset impairment for long-lived assets and the results of the second step of the goodwill impairment test process described in the "Summary of Significant Accounting Policies" in Note 1 to our Consolidated Financial Statements contained in our Annual Report on Form 10-K for fiscal year 2010; competitive conditions in the retail and related services industries; worldwide economic conditions and business uncertainty, the availability of consumer and commercial credit, changes in consumer confidence, tastes, preferences and spending, and changes in vendor relationships; the impact of seasonal buying patterns, including seasonal fluctuations due to weather conditions, which are difficult to forecast with certainty; our dependence on sources outside the United States for significant amounts of our merchandise; our extensive reliance on computer systems to process transactions, summarize results and manage our business; our reliance on third parties to provide us with services in connection with the administration of certain aspects of our business; our ability to attract, motivate and retain key executives and other associates; the outcome of pending and/or future legal proceedings, including product liability claims and proceedings with respect to which the parties have reached a preliminary settlement; and the timing and amount of required pension plan funding. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available. About Sears Holdings Corporation Sears Holdings Corporation is the nations fourth largest broadline retailer with over 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, consumer electronics and automotive repair and maintenance. Sears Holdings is the 2011 ENERGY STAR® Retail Partner of the Year. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. We are the nations largest provider of home services, with more than 11 million service calls made annually. Sears Holdings Corporation operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. For more information, visit Sears Holdings website at www.searsholdings.com. Twitter: @searsholdings | Facebook: http://www.facebook.com/SHCCareers NEWS MEDIA CONTACT: Sears Holdings Public Relations (847) 286-8371 Article 2 THE ASSOCIATED PRESS January 3, 2012, 2:33PM ET Sears adds ex-Brookstone CEO to head merchandising By ANNE DINNOCENZIO AND MICHELLE CHAPMAN NEW YORK Sears Holdings Corp.s CEO says hes looking to former Brookstone head Ron Boire as its new chief merchandising officer to help meld the store experience with online and mobile shopping. The struggling company, which disclosed on Thursday a list of 79 of the 100 to 120 stores it plans to close, said Tuesday that Boire will lead merchandising and retail stores for both the Sears and Kmart brands. He officially starts next week. Boire, whose resume also includes stints at Best Buy and Toys R Us, had served as president and CEO of Brookstone, a specialty retailer that offers entertainment, travel, wellness and consumer electronics products, since October 2009. He was responsible for turning around Brookstone by relaunching its online business and coming out with new products like pillows that have pressure-relieving support and accessories such as wireless keyboards for Apple Inc.s iPad. Brookstone said Chairman Jackson Tai will serve as interim president and CEO while it looks for a permanent successor. Lou DAmbrosio, Sears CEO said Tuesday that the retailer is "in the midst of a transformation of our business, from top to bottom" and that Boire will be a strong addition because of his retail, merchandising and product development experience as well as his past work in helping companies through turnarounds. "We are going to make the store experience more engaging to shop at," DAmbrosio said in an interview with The Associated Press. He added that the company will be looking into how the store fits into the "broader system of shopping," whether its mobile or online. Many store workers are now equipped with iPads that let them track inventory and order products online for shoppers, for example. Boire, 50, told The Associated Press that he first wants to spend time with each of the business leaders before delving into creating a store experience that will allow shoppers to "touch, feel and interact" with the brands." He declined to offer details. Despite the new talent, Sears faces an uphill battle, retail consultant Robin Lewis said. He thinks its chairman and largest shareholder, hedge fund billionaire Edward Lampert, is running the company as a "financial engineering machine," not a retail company. "They can have all the technology geniuses they want, but without the retail root, nothing will work," Lewis said. "They have to update their stores, make them more consumer-friendly and develop a corporate strategy for growth." Sears store closings are the latest and most visible in a long series of moves to try to fix a company that has struggled with falling sales and shabby stores as rivals like Wal-Mart Stores Inc. and Target Corp. spruced up their looks and turned into one-stop shopping sources. The store closings follow a poor holiday shopping season. The company had said last week that revenue at stores open at least a year fell 5.2 percent for the eight weeks through Dec. 25. Sears Holdings runs both Kmart and Sears stores. The projected store closings represent about 3 percent of Sears Holdings U.S. stores. Before heading Brookstone, Boire was president, U.S. Toys, North America for Toys R Us from 2006 to 2009, overseeing merchandising, marketing and operations for 600 stores in the U.S. and 70 in Canada. He joined Toys R Us after serving as the executive vice president and global merchandise manager for Best Buy. Before that, Boire served in a variety of increasingly senior roles during a 17-year career at Sony Electronics Inc. Sears, which is based in Hoffman Estates, Ill., has more than 4,000 stores in the U.S. and Canada. Its shares slipped 17 cents to $31.61 in afternoon trading. Boire is the latest in a string of new hires under DAmbrosio who became Sears CEO in February 2011. Last summer, it named Liz Claiborne executive Edgar O. Huber and CEO and president of its Lands End business. Article 3 Lampert Fund Cuts AutoZone Stake as Clients Pull Money Amid Sears Losses By Miles Weiss and Katherine Burton - Jan 4, 2012 9:00 PM PT Edward Lampert’s hedge fund cut its stake in AutoZone (AZO) Inc. late last month to meet client redemptions amid a series of setbacks atSears Holdings Corp. (SHLD), one of its biggest and highest-profile investments. ESL Investments Inc., the firm run by Lampert, distributed about $1.02 billion worth of AutoZone stock to investors in connection with the closing of one investment partnership and the restructuring of another, according to a regulatory filing yesterday. The Greenwich, Connecticut-based firm also used $351.4 million of shares in AutoZone and AutoNation Inc. (AN) as payment in kind to meet year-end redemptions from its main fund, ESL Partners LP, the filing showed. Lampert has been selling AutoZone and AutoNation shares while holding onto his entire stake in Sears, a strategy that could leave his main hedge fund further concentrated in the Hoffman Estates, Illinois-based retailer. AutoZone rose 19 percent last year and AutoNation shares gained 31 percent, while Sears shares plummeted 56 percent. Sears, the nation’s largest department store chain, announced last week that it would close as many as 120 locations after sales at stores open more than one year declined 5.2 percent during the eight weeks ended Dec. 25. The company said it would book as much as $2.4 billion in noncash expenses to write down the value of good will and deferred tax assets, a step companies often take after determining that future profits will be insufficient to make use of such assets before they expire. Sears, the nation’s largest department store chain, announced last week that it would close as many as 120 locations after sales at stores open more than one year declined 5.2 percent during the eight weeks ended Dec. 25. The company said it would book as much as $2.4 billion in noncash expenses to write down the value of good will and deferred tax assets, a step companies often take after determining that future profits will be insufficient to make use of such assets before they expire. An ESL representative in Lampert’s office yesterday referred a telephone call to Steven Lipin, an outside spokesman, who declined to comment. Fund Performance Lampert formed ESL in 1988 after working on the merger arbitrage desk of Goldman Sachs Group Inc. (GS) under Robert Rubin, who would go on to become U.S. Treasury Secretary under former President Bill Clinton. While the firm doesn’t disclose assets under management, its primary fund, ESL Partners LP, has raised a total of $9.16 billion since 1989, according to a filing with the U.S. Securities and Exchange Commission. ESL Partners produced average annual returns of about 25 percent during its first 14 years, according to two people familiar with the fund who requested anonymity because the information is confidential. It stumbled in 2007 and 2008 with declines of 27 percent and 33 percent, respectively, the people said. The fund gained 55 percent in 2009 and 16 percent the following year, only to decline 4 percent during the first nine months of 2011, the people said. The benchmark Standard & Poor’s 500 Index fell about 8.7 percent, dividends included, over the same period last year. Shutters Acres Partners Lampert’s firm held 4.95 million AutoZone shares, or 12.6 percent of the outstanding stock, according to an SEC filing dated Dec. 30. That’s down from 8.54 million shares, or 21.7 percent, in the previous filing a day earlier and 14.8 million, or 33.8 percent, in December 2010. The decline stemmed in part from the “restructuring” of ESL Investors LLC, which was formed in 1999, according to Delaware state records. As part of the restructuring, ESL Investors distributed 1.16 million AutoZone shares to its “investment member,” the filing said. In addition, ESL disclosed it was shuttering Acres Partners LP, an investment partnership formed in 1996 that held about 1.98 million AutoZone shares. Acres distributed all of the shares on a pro-rata basis to its partners in connection with the closing. Cuts Stake ESL Partners, Lampert’s primary fund, distributed 450,484 AutoZone shares and 5.56 million AutoNation shares to “limited partners that elected in 2011 to redeem their interests” in the fund, according to the filings. The redemptions cut ESL’s stake in AutoNation to 52.5 percent from 56.4 percent of the auto retailer’s shares outstanding. The fund didn’t distribute any of its Sears shares to meet redemptions, according to a separate filing Jan. 3. AutoZone rose 2.2 percent to close yesterday at $326.96 in New York trading. AutoNation fell 6.8 percent to $33.26 in New York. AutoZone, based in Memphis, Tennessee, and AutoNation, located in Fort Lauderdale, Florida, have boosted revenue from parts and services for aging U.S. cars as demand for new vehicles tumbled during the recession, according to Brian Sponheimer, an analyst at Gabelli & Co. in Rye, New York. Auto Sales Rise After bottoming at sales of 10.4 million vehicles in 2009, U.S. vehicle sales rose to an estimated 12.7 million last year and may reach 16 million over the next three or four years, Sponheimer said in a telephone interview yesterday. Vehicles sales averaged about 16.5 million a year from 1997 through 2007, he said. “As these cars have aged, it required more extensive repairs that helped companies like AutoZone increase their average ticket and comparable-store sales,” Sponheimer said. “AutoNation has done an outstanding job within their parts and service business, which constitutes well over 50 percent of a dealership’s gross profit on average.” To contact the reporters on this story: Miles Weiss in Washington at mweiss@bloomberg.net; Katherine Burton in New York at kburton@bloomberg.net To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net Article 4 Sears realizes future is Mobile Marketing, not Bricks and Mortar (BKS, SHLD, MFON) CommerceTel is leader in Mobile Marketing with 231% jump in 3Q Earnings By Jonathan Yates Published: January 6, 2012 7:31:22 AM PST What ever flourishes over time is the most adaptable, as demonstrated by the third quarter revenues of mobile marketing lead CommerceTel (OTC: MFON) increasing by 231% while the stock prices of old school brick and mortar retailers such as Sears Holdings (NASDAQ: SHLD) and Barnes and Noble (NYSE: BKS) plunged. While third quarter earnings were very strong for CommerceTel, the share price for Sears Holding (SHLD) fell by over 50%. For the last month, Barnes & Noble (BKS) is off more than 30%. But the recent hire of a new chief merchandising officer for Sears Holdings reveals that the company realizes its future is in mobile marketing. While Sears is closing 120 brick and mortar stores, it hired Ron Boire, according to an article in Bloomberg Businessweek, as he "...was responsible for turning around Brookstone by relaunching its online business and coming out with new products like pillows that have pressure-relieving support and accessories such as wireless keyboards for Apple Inc.s iPad." The piece in Businessweek by Anne DInnocenzio and Michelle Chapman, "Sears adds ex-Brookstone CEO to head merchandising, also noted that Boire will be tasked with implementing a "broader system of shopping," be it mobile or online. General George Patton once remarked that, "Fixed fortifications are monuments to the stupidity of mankind." The same can now be said about much of brick and mortar retail. It costs money to lease stores. This is wasted when fewer visit Sears (SHLD) or Barnes & Noble (BKS) as more are shopping online over their iPhone or Android. What Sears now realizes is needed is what CommerceTel delivers: award-winning proprietary mobile marketing technologies. The competitive advantage of CommerceTel is the C4, its unique, enterprise-grade platform empowering brands to engage mobile consumers via multiple channels. Customers for CommerceTel include CNN, Disney, Sony Pictures, AT&T, Verizon, USA Network, numerous professional sports franchises, the Golf Channel, and NBC Universal. So successful has CommerceTel been in more than 1500 customer engagements, that it has a client retention rate of over 90%. The future is now with mobile marketing, and CommerceTel has proven that it can deliver for its customers. From this, the shareholders will benefit, too. Read More