Tuesday, April 18, 2006

Report: Sears Tests Auto Center in Kmart Stores

Chain Store Age

CHICAGO - Sears Holdings Corp. is testing its Sears Auto Centers format in Kmart stores—a move that, if rolled out companywide, could double the size of Sears’ auto-repair business and make use of hundreds of vacant repair shops at Kmart stores around the nation, Crain’s Chicago Business reported. Some of the first Sears Auto Centers are expected to go into Kmart stores in the Detroit area, the publication said.

U.S. Auto Care’s Big O Tires Inc., a franchise which had been operating 13 outlets in Kmart stores in the Detroit area and went into Chapter 11 bankruptcy reorganization last year, shuttered outlets in March after Kmart told the Bankruptcy Court that it had another tenant for the spaces.

Kmart declined to name the potential tenant in court filings, but Crain’s Chicago Business said people familiar with the operation say Sears officials have been in Michigan looking to turn at least some of the former Big O locations into Sears Auto Centers.


  1. Didnt some KMarts once have auto centers a long while back around here?

  2. Yeah, they had them for years, usually attached to the store. There was one Kmart in Roanoke that used to have a free-standing auto-center.

  3. This makes a lot of sense. Kmart has a lot of inoperative auto centers that aren't making any money, and Sears knows how to operate auto centers profitably.

    Despite Eddie Lampert's recent claims to the contrary, I harbor serious doubts about the future of Sears Holdings. All of the recent attempts to "co-brand" its Kmart stores seems to be "muddying" both brands. Retailing is not about brands or real estate; it's about offering a compelling shopping experience, which Sears Holdings has not been able to deliver at any of its stores.

  4. I never understood Kmart’s closing of the auto centers in the first place. If you have a needed, important destination that forces customers to spend at least an hour of downtime in your store, that’s like shooting fish in a barrel.

    The Penske sublease was totally the wrong direction to take, because unlike, say, Goodyear (who took over most of Federated’s auto centers) or Firestone (at JCPenney), Penske didn’t have the all-encompassing reach that even the Kmart auto center name had. Mismanagement and higher prices didn’t help things.

    This is the only part of the Sears-Kmart synergy plan that makes sense. Sears Auto Centers (with their connection to DieHard) are a strong brand name and they have a following. Now, the challenge becomes, how do you get them to shop at Kmart while they wait?

    Sears Holdings is thousands of good intentions undone by poor execution. It may never truly turn around.