Sears vs. JCPenney: Whose new plan will prevail?

By RetailFOXBusiness

Judge approves sale of Sears to Eddie Lampert for $5.2 billion

FBN’s Gerri Willis discusses how a U.S. bankruptcy judge approved Eddie Lampert’s $5.2 billion takeover of Sears.

While Sears recently got a new lease on life, rival JCPenney is going through some struggles of its own, and with both retailers releasing their new game plans for the future the big question is, whose plan will prevail?

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Earlier this week, Sears Chairman Eddie Lampert gave customers a glimpse inside his new vision for the embattled retailer after a New York bankruptcy judge approved his hedge fund’s $5.2 billion rescue bid to save it.

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Lampert told The Wall Street Journal that he wants to shrink the remaining 425 stores, sell less apparel and go big on appliances and tools. He also is on the hunt for a new CEO to execute his plan.

His tactic is the complete opposite from JCPenney’s, which a week prior announced it’s discontinuing selling major appliances at all of its locations by the end of month.

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JCPJ.C. PENNEY1.12-0.01-0.89%

Instead, the retailer, which has continued to battle declining sales and executive vacancies over the last couple of months, will focus on its strengths, which include apparel and “soft” home furnishings.

Bob Phibbs, CEO of New York-based consultancy The Retail Doctor says it’s encouraging to see JCPenney make the “smart move” of getting out of the appliance business because they should have never been there in the first place.

“Low-margin products such as appliances require trained salespeople to close the deal, but it’s rare to find anyone on the floor at JCPenney who can help,” Phibbs says, adding that the company, just like Sears, has been floundering without a bold vision for some time.

He says to execute these plans both companies need clear strategies in order to reach their full potential as a “force in the industry,” instead of just throwing things at a wall to see what sticks.

“While JC Penney still has a fighting chance, Sears is too far gone, and now they are making the strange choice of moving back into appliances. While Sears was always about hard goods, it’s difficult to sell appliances when few shoppers even know that Sears is still open for business,” Phibbs adds.

Dan Nevin, CEO of Doddle North America, a tech company that helps many top retailers with online purchasing capabilities, says the likely winner will really be the one who fully commits to their strategy.

“I couldn't agree more with both JCPenney and Sears and their decision to focus on areas of strength. In the long term this will not only improve their own bottom line, but allow them to focus on building a stronger identity and advance in areas that customers recognize them for,” he tells FOX Business.

However, investor and finance expert Eric Schiffer believes JCPenney’s plan will likely be the one to prevail as Sears’ plan to focus on appliances won’t compete with retailer leaders such as Home Depot, Lowe’s and Amazon.

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“They are far too late to the party and are leading themselves into a killing machine,” Schiffer says.

“Sears doesn’t have the power to get the best leverage with vendors and will decimate foot traffic because appliances don’t bring in repeat visitors who can spend elsewhere to lift up the wrecked retailer.”