Sears Holdings, which owns Sears and Kmart, has for the first time brought the two brands together under the same roof by opening a 10K SF Kmart inside a Sears store at 2307 Beverley Road in Brooklyn.
The retailer, which is beleaguered by falling sales and rising debt, is presumably testing the new initiative to see if the combined brands can spark some kind of turnaround, CNBC reports.
Sears faces steep challenges in its turnaround bid. In Q1, comp-store sales fell by 11.9%, and in late May the company announced the closure of 72 more locations.
The Kmart-within-Sears sells everyday items, such as groceries, health and beauty supplies and pet supplies. The store focuses solely on grab-and-go items for the city shopper, Larry Costello, a spokesman for Sears Holdings, told USA Today.
The Kmart is on the lower level of the Sears, and customers need to check out separately at each.
For now, the company has no other plans to open Kmarts within Sears stores, but executives are going to evaluate how the one in Brooklyn performs, with an eye toward expansion if it works. In the near future, Sears will also begin opening a 2K SF to 3K SF appliance shop in Kmart locations in the New York area and other cities, Retail Dive reports.
Sears has been experimenting with other format changes as well. Late last year, it opened a few free-standing appliance and mattress stores measuring 12K SF to 16K SF.
Target has also been opening small footprint urban stores in Brooklyn, but there are a number of differences between the strategies. Target's stores are larger than the small Kmarts — one in Bensonhurst is about 20K SF — and they also function as pickup centers for online orders.
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