In a multimillion-dollar effort to gain new business, Sears, Roebuck & Co. and J. C. Penney Co. Inc. are polishing up their images--upgrading their stores and merchandise--to lure customers from the traditional high-class department stores.
Here at the world's largest shopping mall, Sears will open what it proudly describes as "the store of the future" on Monday. Through bold modern graphics, soft accent lighting, and easy-to-shop departments, the nation's largest retailer hopes to entice customers into buying clothes, linens and other soft goods that traditionally have been Sears' weakest lines of business.
Meanwhile, at the Annapolis Mall, Penney's--the nation's third-largest retailer--on Wednesday will unveil the first new store that the chain says "charts the company's course for the '80s."
Trying to upgrade its image from the functional to the fashionable, the store has soft lighting, plush carpeting, ceramic tile and mirrored posts to reflect Penney's new emphasis on high-fashion goods--including clothes created by one of the nation's leading fashion designers, Halston.
"We don't want to be known as a discounter but as a department store," said Penney's spokesperson Amelia M. Myers.
The Annapolis and King of Prussia stores represent just the beginning of a total revamping of the two retail chains.
Over the next five years, Penney's will spend $1 billion to update all of its older stores to the same "new look" at Annapolis in which the traditional linoleum tile floors have been replaced with more costly ceramic tile. In the Washington area, Penney's will spend between $4 million and $6 million to redo the Springfield store. The other Penney units will be updated in the next 18 months, redone with new fixtures to "look more like a Woodies or a Hecht's," Myers said.
Sears also plans to modernize almost all of its 392 full-line and 357 medium-size stores over the next few years. Remodeling of its store in Montgomery Mall in Bethesda is already underway.
Overall, the changes that Sears and Penney's plan to make are not unique for the retailing industry. Scores of other department stores already have updated their looks and merchandise after concluding that higher-fashion goods provide the best sales and profits. As a result, the new Sears and Penney's outlets look little different from what shoppers already see in other stores.
Even so, the changes reflected in the Annapolis and King of Prussia stores are significant for the two age-old merchandisers, who up to now have emphasized the utilitarian over the fashionable.
That's why Edward A. Brennan, chairman and chief executive officer of Sears' merchandise group said, "few events have stirred greater excitement throughout the Sears organization" last week when the company held a press briefing to show off its Pennsylvania store to reporters.
The changes also have created enthusiasm on Wall Street, where analysts hope that the modernization will increase earnings significantly.
Morton Greenstein, a financial analyst with Bear, Stearns & Co., noted that sales increased by 30 percent at Sears' test Store of the Future in a Chicago suburb. Sales should increase between 5 and 10 percent at each revamped Penney's store, Greenstein estimates.
Sears' King of Prussia store is the result of a three-year program to "catch up with some competitors," Brennan said. "We have literally torn apart the store on paper and then reassembled the more than 770 merchandise lines that comprise it into a new, more exciting environment."
The emphasis at the new store is clear: the lines of merchandise that customers don't normally come to Sears to buy. For example, the first department encountered after entering the main door is the new contemporary women's department designed to appeal to 18- to 34-year-old working women.
The Sears customer traditionally has been the male shopper who buys hardware, tools and durable items such as refrigerators, washing machines and air conditioners. The challenge was not to get new customers, because some 36 million households already actively shop at Sears, Brennan noted. "Rather, we want to sell those customers already there a broader assortment of goods and services," he said.
Chief among those new services are the new financial activities Sears is able to offer through its recent acquisitions of Dean Witter Reynolds and the Coldwell Banker real estate agency. King of Prussia will be Sears' 48th store to offer brokerage services as well as its traditional Allstate Insurance Co. activities. Real estate services will be added to the store's financial center shortly.
To get to this new center and the traditional departments, one has to pass through the men's, women's or children's departments, where the clothes are highlighted by soft lighting, attractive modern wall displays and large, clear graphics.
What's more, the automotive servicing department--complete with 26 repair bays--has been painted in bright reds and oranges to make it particularly inviting to the woman customer, who also will be greeted by a female clerk, Sears officials note.
The new store also is trying to appeal to those customers who don't have time to shop. "One of the things our customers are lacking today is the time for buying," said John Easter, Sears' vice president for home fashions.
The company thus has rearranged its departments, making it easier for customers to find an item. For example, bedspreads and sheets and comforters no longer are in two separate departments, but rather in one new "bedroom shop." Similarly, air conditioners, fans, and heating equipment are in one central department instead of four.
Additionally, all appliances are categorized (such as built-in and free-standing), with clear labels on each discussing the features and price. The goal "is to make it simple for the customer to make that purchase decision" without a sales clerk, Easter said.
Following that theme, Sears also has simplified the check-out process, with the goal of cutting the current time in half.
In the process of modernizing, Sears decided to eliminate merchandise that didn't sell well. Thus, the King of Prussia store does not sell hunting supplies, musical equipment or wallpaper--even though most of these still can be obtained through the Sears catalogue.
However, the company has not dropped any entire product line, Brennan stressed.
"We have developed a true department store--the one place where 36 million American families who regularly shop at Sears can find everything they want and need--hard lines, appliances, home fashions, automotive, apparel, financial services," Brennan said.
"This is particularly significant at a time when almost all the retailers who used to carry a wide assortment of merchandise have become increasingly specialized," he added.
In making that comment, Brennan was clearly taking aim at Penney's, which decided last February to drop entire merchandise lines that did not sell well: furniture, major appliances, paint, hardware, garden goods, and automotive services.
"You can't really be an expert in everything--we learned that the hard way," William D. Striegl, Penney's district manager for area stores, said last week when Penney's showed off its new store to reporters.
The absence of those goods is the most obvious difference between Penney's Annapolis store and the existing stores where the last of Penney's furniture, hardware and appliances still are being sold. Many of the automotive centers already have been taken over by Firestone Tire & Rubber Co.
Eventually, when all of the discontinued items are sold, Penney's will devote that space to apparel and home furnishings departments, which have been upgraded with higher quality and somewhat higher priced merchandise.
"We are going after working people--career women who don't know that they can go to J. C. Penney and shop for quality items," Striegl said.
Perhaps nowhere is that philosophy better demonstrated than at Penney's brand new Halston department that is set off from the rest of the store by the bald, strikingly white large female mannequins.
Additionally, the Annapolis store is offering a personal shopper to help clothe women who don't have time to shop themselves. Although many other department stores have personal shoppers, the concept is new to Penney's.
Similarly, Penney's sales clerks have received several hours of Color Me Beautiful training to aid customers in selecting the best clothing colors for their complexion and hair coloring.
There is one more significant change at Penney's Annapolis store that few customers will note: The store's top management are all women, "the only such store that I know of" in Penneys, Striegl said.
Will the updating work?
Financial analysts are not sure. But, said Bear Stearns' Greenstein, "It's the move they have to do."