Home Apparel Twitter map of APP logo

Apparel Magazine


Welcome, Guest |   Sign In   |   Register  
Apparel Magazine
Print Email Page RSS Feeds

Posted Date: 6/1/2003

Analysts' Perspectives - June 2003

How is Sears' divestiture of its credit card business going to affect its growth going foward?

"Sears is fundamentally a retail operation. All other ventures, profitable or not, tend to distract from the core business. Questions about non-retail store divestitures were raised already a dozen years ago with the termination of the Sears catalog and separation of Allstate Insurance. Now, Sears is well on the way to repositioning itself as the mall-based counterpart of Kohl's, and experimenting even with free-standing locations. It'll operate better without the sideshows."

"For Sears to exit this business is a result of mistakenly applying the concept of 'outsourcing.' Good practice demands an enterprise focus on its core competencies and outsource non-core functions to those who can provide them better/cheaper. In Sears' case it is difficult to imagine they are not extremely competent at a function they have controlled for years. This is an example of poor strategic analysis and decision-making. Others, like American Express, have become so adept at credit card processing, they are able to grow revenues and profits by providing the service to others. Sears is missing a solid growth and profit improvement opportunity by giving up rather than leveraging a key skill."

"If divesting the credit card business translates into refocusing on the core retailing business, then it has the potential to be a very good move for Sears that could result in increased growth. By redoubling efforts in supply chain management and applying 'best practices' in product sourcing and supplier relations, . logistics, inventory management, stocking and replenishment policies and related [areas], Sears certainly has the potential to significantly improve its position in the mind of the consumer."

"Divestiture of a major division of a business can have positive ramifications on the remainder of the business if executed correctly and can serve as a catalyst for the CEO change agenda. Executive time can become more focused on strategies directly related to the core business. In addition, the availability of capital for growth can become more plentiful. In short, a more focused strategy, more targeted use of a larger pool of capital and improved operational execution can make a significant divestiture lead to improved business performance and accelerate higher returns to shareholders."


Rate this Content (5 Being the Best)
Current rating: 0 (0 ratings)


Discover How To Keep Up With More of Your Mobile Customers
6/24/2014 11:00:00 AM (EST)
Susan Nichols, Publisher, Apparel Magazine
Ron Klein, "Total Retail" Service Leader, PwC Advisory
Annabelle Hoover, Director of Customer Service, North America, BROOKS SPORTS, INC.
Marie-Pascale Authie, Solution Consultant, Infor Fashion
Bob McKee, Industry Strategy Director, Infor Fashion
View On Demand

Planning in the Omnichannel World with a Single View of Inventory
5/13/2014 11:00:00 AM (EST)
Susan Nichols, Publisher, Apparel Magazine
Rich Pedott, Partner, Columbus Consulting
Peter Charness, SVP America’s & CMO, TXT MAPLE LAKE
View On Demand

How product lifecycle management fuels the momentum of fashion How product lifecycle management fuels the momentum of fashion
Leading fashion companies generate a special kind of momentum, a phenomenon where recent success fuels current success, which in turn sparks future success. The ability to rapidly turn today’s hit product into tomorrow’s durable brand is no accident—it’s a specific set of practices that companies can identify and repeat to achieve lasting competitive advantage. Read this White Paper – authored by Bob McKee, Infor, Industry Strategy Director to learn how fashion companies need to strive for better responsiveness to consumer trends, more efficient design and production, smarter sourcing, and improved capabilities for monitoring compliance and sustainability requirements.


Virtual Fitting - What is Possible? Virtual Fitting - What is Possible?
Customer and market-driven products are the main objective for success. The route taken to achieve that objective must be constantly shortened, making processes faster and more cost-efficient. This specifically requires using the right processes and technologies, for example, increasing the effectiveness of prototyping through virtual 3D. We invite you to learn more about the capabilities of today's virtual fitting technology.
Download Now

All materials on this site Copyright Edgell Communications. All rights reserved.