Business Analysis of Sears Holdings

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Sears Holdings

SEARS HOLDINGS

Business Overview

Sears Holdings Corporation operates as an integrated retailer in the United States. It operates in two segments, Kmart and Sears Domestic. The Kmart segment operates retail stores that offer a range of products, including consumer electronics, seasonal merchandise, outdoor living, toys, lawn and garden equipment, food and consumables, and apparel; and in-store pharmacies. It provides merchandise under the Jaclyn Smith, Craftsman, and Joe Boxer labels; Sears brand products, such as Kenmore and DieHard; and Kenmore-branded products. As of January 28, 2017, this segment operated approximately 735 Kmart stores. The Sears Domestic segment operates stores that provide appliances, consumer electronics/connected solutions, tools, sporting goods, outdoor living, lawn and garden equipment, apparel, footwear, jewelry, and accessories, as well as automotive services and products, such as tires, batteries, and home fashion products. It also offers merchandise, and parts and services to commercial customers; parts and repair services for appliances, lawn and garden equipment, consumer electronics, floor care products, and heating and cooling systems; home improvement services, such as siding, windows, cabinet refacing, kitchen remodeling, roofing, carpet and upholstery cleaning, air duct cleaning, and garage door installation and repair; and protection agreements and product installation services. This segment provides merchandise under the Kenmore, DieHard, Bongo, Covington, Canyon River Blues, Simply Styled, Everlast, Metaphor, Roebuck & Co., Outdoor Life, and Structure brands, as well as under the Roadhandler, Levi's, Craftsman, and WallyHome brands. As of January 28, 2017, this segment operated 670 full-line stores and 25 specialty stores. Sears Holdings Corporation was founded in 1899 and is based in Hoffman Estates, Illinois.

Sears Holdings

Sears Holdings


R&P Rank: 107
Sector: Retail
Industry:Broadline Retail
H.Q Location:Illinois
Website: www.searsholdings.com
Company Address:
3333 BEVERLY ROAD, HOFFMAN ESTATES IL 60179
Ph:847-286-2500

Business Analysis of Sears Holdings

The Retail Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Sears Holdings compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Sears Holdings to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Sears Holdings with an interactive chart.

  1. Revenue Growth: Sears Holdings reported a revenue growth of -19.4% year-on-year during 2016. Broadline Retail Industry grew at 0.3% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Sears Holdings spent 76.9% of its total revenues on COGS. Broadline Retail industry average (COGS share of revenue) in the same period was 74.8%
  3. R&D share of Revenues: Sears Holdings R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Sears Holdings spent 27.3% of its total revenues on Sales, Marketing, and General Administration (SG&A). Broadline Retail industry average SG&A spending in the same period was 19.8%
  5. Inventory share of Revenues: As a percentage of revenue, Sears Holdings spent 20.6% of its total revenues on Inventories. Broadline Retail industry average Inventory spending in the same period was 11.0%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Sears Holdings invested 6.3% of its total revenues on Accounts Payable (A/P) Broadline Retail industry average Accounts Payable investment in the same period was 8.5%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Sears Holdings invested 1.7% of its total revenues on Accounts Receivable (A/R). Broadline Retail industry average Accounts Receivable investment in the same period was 1.3%
  8. PP&E share of Revenues: As a percentage of revenue, Sears Holdings invested 10.5% of its total revenues on Property, Plants, and Equipments (PP&E). Broadline Retail industry average PPE investment in the same period was 23.2%
  9. Intangibles share of Revenues: As a percentage of revenue, Sears Holdings invested 8.7% of its total revenues on Intangibles. Broadline Retail industry average Intangibles investment in the same period was 5.1%
  10. Net Margins: Sears Holdings Net Margins in the year 2016 were -4.5%. Broadline Retail industry average Net Margins in the same period were 2.7%

Sector and Industry Association of Sears Holdings

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Sears Holdings is associated with Retail Sector and Broadline Retail Industry.

Retail sector is comprised of the following industries: Broadline Retail; Grocery Retail; Specialty Retail; Apparel Retail; Home Improvement Retail; Specialized Consumer Services. The definitions for each of the industries is as follows:

  • Broadline Retail industry includes retail outlets and wholesalers offering a wide variety of products including both hard goods and soft goods.
  • Grocery Retail industry includes retail stores that primarily offer non-perishable food that is packaged in cans, bottles and boxes, with some also having fresh produce, butchers, delis, and bakeries
  • Specialty Retail industry includes retailers and wholesalers concentrating on a Single Class of Goods, such as electronics, books, automotive parts or closeouts. It also includes automobile dealerships, video rental stores, dollar stores, duty-free shops and automotive fuel stations not owned by oil companies.
  • Apparel Retail industry consists of retailers and wholesalers specializing mainly in Clothing, Shoes, Jewelry, Sunglasses and Other accessories.
  • Home Improvement Retail industry includes retailers and wholesalers concentrating on the sale of home improvement products, including Garden Equipment, Carpets, Wallpaper, Paint, Home Furniture, Blinds and Curtains, and Building materials.
  • Specialized Consumer Services industry includes providers of consumer services such as Auction Houses, Day-care Centers, Dry Cleaners, Schools, Consumer Rental Companies, Veterinary Clinics, Hair Salons and providers of Funeral, Lawn-maintenance, Consumer-storage, Heating and Cooling installation and Plumbing services.

Industry Ranking of Sears Holdings

With $25.1 billion revenues, Sears Holdings ranked number 5 of all the companies in the US Broadline Retail industry. There were a total of 21 public companies in the US Broadline Retail industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Broadline Retail industry by revenues during 2016 were:

  1. Walmart ($482.1 billion)
  2. Costco ($118.7 billion)
  3. Target ($73.8 billion)
  4. Macy's ($27.1 billion)
  5. Sears Holdings ($25.1 billion)
  6. Dollar General ($20.4 billion)
  7. Kohl's ($19.2 billion)
  8. Dollar Tree ($15.5 billion)
  9. J. C. Penney ($12.6 billion)
  10. Dillard's ($6.8 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Sears Holdingsand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of sears-holdings

Costco (COST) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Costco Wholesale Corp with $119 billion revenues in the year 2016 was the number 2 Broadline Retail company. Read this report to know the top competitors of Costco and identify growth and cost optimization opportunities of Costco

Target (TGT) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Target Corp with $74 billion revenues in the year 2016 was the number 3 Broadline Retail company. Read this report to know the top competitors of Target and identify growth and cost optimization opportunities of Target

Macy’s (M) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Macy's, Inc. with $27 billion revenues in the year 2016 was the number 4 Broadline Retail company. Read this report to know the top competitors of Macy's and identify growth and cost optimization opportunities of Macy's

Dollar General (DG) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Dollar General Corp with $20 billion revenues in the year 2016 was the number 6 Broadline Retail company. Read this report to know the top competitors of Dollar General and identify growth and cost optimization opportunities of Dollar General

Kohl’s (KSS) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Kohl's Corp with $19 billion revenues in the year 2016 was the number 7 Broadline Retail company. Read this report to know the top competitors of Kohl's and identify growth and cost optimization opportunities of Kohl's

Dollar Tree (DLTR) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Dollar Tree Inc with $15 billion revenues in the year 2016 was the number 8 Broadline Retail company. Read this report to know the top competitors of Dollar Tree and identify growth and cost optimization opportunities of Dollar Tree

Revenues Analysis

Sears Holdings (SHLD) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Sears Holdings Corp (SHLD) from 2012 to 2016. Sears Holdings generated a total of $25.1 billion revenues during 2016. Sears Holdings reported a revenue growth of -19.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in February.

Sears Holdings (SHLD) Revenues And Revenue Growth From 2005 To 2016

This report provides the last twelve years revenues and revenue growth of Sears Holdings Corp (SHLD) from 2005 to 2016. Sears Holdings generated a total of $25.1 billion revenues during 2016. Sears Holdings reported a revenue growth of -19.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in February.

Sears Holdings (SHLD) Revenue Growth Comparison With Industry Growth From 2012...

This report provides a comparison of Sears Holdings Corp (SHLD) revenue growth with Broadline Retail industry growth during the last five years from 2012 to 2016. Sears Holdings reported a revenue growth of -19.4% year-over-year during 2016. The Broadline Retail industry growth was 0.3% year-over-year during 2016. Sears Holdings growth was slower than the industry during 2016.

Profit Analysis