NEW YORK (CNN/Money) -
With Sears having shed its troublesome credit card business in July, its other business units -- including its venerable home appliance franchise -- appear to be quickly getting much-needed facelifts.
The retailer will relaunch its online operation, Sears.com, Tuesday, incorporating a redesign that's expected to prominently display five product categories -- home appliances, electronics, lawn and garden, fitness equipment, and jewelry.
"Sears.com will be easier and faster to navigate and will have five times as much information about the home appliances products," Bill Bass, vice president of Sears.com, told CNN/Money.
Additionally, the new site will let users survey Sears' best-sellers across its home appliances offerings and compare the lowest and highest-priced brands. It will also feature Spanish brochures for 900 of the most-researched products.
"We sell 3,500 different appliances. So our challenge is to figure out how to quickly get you the appliance that's right for you," said Bass, who is also senior vice president of Lands' End, the catalog and Internet specialty clothier that Sears (S: Research, Estimates) acquired last year.
"Our research shows that as much as 15 percent of Sears store sales are influenced by customer research on Sears.com. That number is even higher for appliances -- as many as 20 percent," Bass noted.
According to Bass, Sears.com averaged 4.3 million users a month so far this year. However, he wouldn't disclose sales for the online operation.
Defending appliance positioning
Given that Sears' once untouchable dominance in the appliance business is wearing down, Deutsche Bank Securities analyst Bill Dreher said it makes sense for it to aggressively defend its position in the sector.
To that end, the company announced a major overhaul in July, including price cuts, same-day pickup and a competitive price-match policy that puts money back into customers' pockets.
Sears still is the leader in home appliance sales, with 38.6 percent of the $36 billion market, but that's down from 41 percent in 2001.
Home improvement retailer Lowe's (LOWE: Research, Estimates) ranks second with 13.8 percent of the market, while Home Depot (HD: Research, Estimates) has 5.3 percent, according to Stevenson Group, a Louisville, Ky.-based market research firm.
"Sears has a significant competitive advantage in the hardline arena. They have the top appliance brands like Kenmore and Maytag and a remarkable distribution system," said Dreher. "The can leverage the Internet to their advantage and be real winners again."
The retailer last month finally snapped a two-year streak of sales declines, citing robust appliance demand for the uptick in August sales at stores open at least a year.
Repositioning competitive posture
Without its credit business, Sears is now a pure-play retailer and therefore needs to leverage its core product categories in order to stem the loss of market share to larger competitors Wal-Mart (WMT: Research, Estimates) and Target (TGT: Research, Estimates).
It already lost its No. 4 spot to Target on the National Retail Federation's latest list of largest U.S. retailers in terms of total sales.
"It's clear that the company is redoubling efforts to strengthen itself and build a competitive advantage," said Dreher. "Anything that distracts the management from doing just that will be de-emphasized. The sale of its National Tire and Battery unit is a step in that direction."
Earlier this week, Hoffman Estates, Ill.-based Sears sold National Tire, which operates 226 retail tire and automotive centers in 20 states, with annual revenue of about $425 million, to independent tire retailer TBC Corp. (TBCC: Research, Estimates).
"The tire business did break even on a cash basis but not on a full-loaded cost basis, or the total costs incurred to run that business," said Dreher.
Sears Chairman and CEO Alan Lacy said in a statement that the deal reflects the company's attempts to "further refine its core business strategy."
Bass also said the Web site will sell apparel and, for the first time from Sears, CDs and DVDs. Sears' retail stores currently don't sell CDs and DVDs.
The Web site's apparel collection will be launched in 2004 and is expected to feature the retailer's private label Covington, Apostrophe, and Canyon River Blues brands.
Bass said no decision has been made about the Structure clothing line that Sears acquired this month from Limited Brands (LTD: Research, Estimates) or the newly launched women's apparel line by Latin fashion designer and TV personality Lucy Pereda.
Dreher is skeptical about the company's push into promoting apparel. "Clothes are a tough sell on the Web. People can't feel the fabric and sizing is a challenge. They're trying hard to improve the softline side but it's not a proven winner for them. Electronics, appliance, fitness products are their strengths."
Bass agrees, but he's not talking about what next on the makeover list.
"Once we get past the credit business, we're figuring out how the dots get connected. We're changing and we're striking fear in the heart of our competitors. It's exciting to be here," Bass said.
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