Can Sears be as cool as LL Cool J?

Ailing retailer enlists hip-hop artist, MTV to lure the young

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Associated Press / June 19, 2008

CHICAGO - First came the decision to stock Skechers, footwear teens favor.

Then came the personalized avatar, the virtual identity Sears shoppers could accessorize online.

Now, the company that once offered hearing aids and dentures is teaming up with MTV to produce a back-to-school movie - while adding a line of street clothes and accessories designed by hip-hop artist LL Cool J.

After spending years trying to get shoppers to embrace its softer side, the ailing retailer is still known more for its hardware than its handbags. So its latest strategy to stem slumping sales is to try to tap yet another market: the young, hip, and urban.

"While mom may decide what the acceptable place is to shop, the kids are deciding what clothes they want and what places have it," said Richard Gerstein, Sears' chief marketing officer. "If we come out of our season with much more relevance with this group, and improving our sales and profitability with this group, we think it's a big win."

Whether the initiatives can help Sears shed its stale image is up in the air. But what's certain, experts say, is that the chain, led by financier Edward Lampert, desperately needs to reinvent itself if it's going to survive.

"It's a great place to buy a washing machine, but you wouldn't want to get your jeans there," said Jayne Mountford, vice president at Stylesight, a retail forecasting firm.

That's the sentiment Sears executives hope "The American Mall" movie and the LL Cool J gear, which will be available in mid-September, can change - particularly among the fickle and trend-conscious teen audience that's so far viewed the chain with caution.

"The American Mall," produced by the team responsible for the tween-loved "High School Musical" series, is a massive cross-promotion between MTV and Sears.

Scenes for the 87-minute film were shot in a Utah Sears store. Characters wear Sears clothes, which shoppers can purchase. And the actors will appear in Sears advertisements and circulars. Meanwhile, Sears will sell the DVD and soundtrack in stores, while promoting the film and getting commercial time when the movie airs on MTV on Aug. 11.

Neither Sears nor MTV executives would disclose their investment in the project, in the works since November.

"If the movie works, it will benefit Sears certainly, as their exposure will benefit us," said John Shea, an executive vice president at MTV Networks Music & Logo Group.

But some industry observers doubt Sears has the credibility to compete in the increasingly crowded teen market. Nor are they sure whether this latest effort will yield more success than previous initiatives.

"Trying to be everything to everybody is difficult because consumers have so many choices," said Morningstar analyst Kim Picciola. "If they can manage to reinvent themselves, I think it will be a big win for them. But I think that's going to be a challenge in this current environment."

Founded in 1886, Sears helped pioneer the mail-order business and grew to become the nation's largest retailer. It remained a back-to-school staple for generations but fell out of favor as shoppers who found its brands dowdy and unexciting defected.

In 2005, Lampert acquired Sears, Roebuck and Co. and merged it with Kmart under the umbrella of Sears Holdings Corp. Under Lampert's leadership, the company initially posted high profits, thanks in part to strong investment income, which has long since disappeared, along with the company's once-hefty war chest, which has dwindled as it spent billions buying back stock.

During the most recent fiscal year, earnings dropped 44 percent to $826 million. And during the first quarter of 2008, Sears lost $56 million - its largest quarterly loss since the companies combined - and issued a dour sales forecast for the rest of the year.

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