ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, March 6, 1996 TAG: 9603060030
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: MEGAN SCHNABE< STAFF WRITER
Three years after discontinuing its catalog business and closing hundreds of small-town catalog stores, Sears, Roebuck and Co. is getting back to its rural roots in Southwest Virginia.
The Chicago-based retail chain is advertising for local entrepreneurs to own and operate what it calls "authorized dealer" stores in Bedford, Covington, Lexington, Marion and Galax.
Dealer stores are similar to the company's old catalog merchants, said Bob McHenry, public affairs manager for Sears in Chicago. These stores, which are about twice the size of the former catalog outlets, carry appliances, home electronics, tools and lawn merchandise and offer repair services. The local owners are responsible for rent and payroll; Sears supplies the inventory, advertising and training.
Sears started the dealer store program in June 1993, just six months after it announced plans to close its catalog locations. Now there are 390 dealer stores across the nation; Sears plans to have 800 such stores in place by 2000. They're targeted toward communities with populations of 5,000 to 25,000; most are in towns that once had Sears catalog stores.
Max Marcus owned a catalog store in Bedford for 19 years; he got out of the business when Sears discontinued its mail-order operations. Although Sears plans to move back into Bedford, Marcus said he isn't interested in starting over with the retailer.
"We always had a good business there," he said. "Who would have thought Sears would ever get out of the catalog business? I guess they realized they made a mistake."
"We certainly regretted having to close the [catalog] stores when we did," McHenry said. "Sears' heritage has always been in rural America."
Shopping patterns changed, however, and consumers no longer relied on catalogs as heavily as they once did. But rural customers objected to the store closings, he said, so Sears responded with the dealer stores.
The dealer stores are part of a larger plan by Sears to expand into strip malls and free-standing buildings - what retail analyst Robert Niemeyer called the retailer's "off-the-mall" strategy. The retailer now operates about 100 free-standing hardware stores and 85 furniture stores, and more are planned. The dealer stores will fill the niches where there are no large Sears stores nearby, said Niemeyer, who is with PNC Institutional Investment Services in Philadelphia.
Thanks to the growth of discount chains such as Wal-Mart and Circuit City, the home electronics and appliance business has become highly competitive in recent years. But McHenry said Sears' reputation and store brands - including Kenmore, Craftsman and DieHard - help the dealer stores compete.
Niemeyer agreed. "I would not underestimate the name of the Sears franchise," he said.
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