When we talk about the department store sector in the country, undoubtedly brands such as Liverpool, El Palacio de Hierro or Sears are some of the ones that first come to mind.
However, because of what is happening in another market, one of these emblematic firms is evaluating the possibility of adopting a new name.
We are talking about Sears, a firm that in the Mexican market is operated by Grupo Sanborns de Carlos Slim and that, given the crisis that the brand is suffering in the United States, would be evaluating changing its name.
At least that is how he allowed it to be seen in a meeting with investors Patrick Slim Domit, director of Grupo Sanborns, who, when presenting the most recent report of the brand’s results, affirmed that the company has considered a name change for Sears, although there is still no Nothing concrete.
“The reality is that (the Sears brand) works and is very well positioned in Mexico, yes it has sometimes been an obstacle to get some brands. We like the name, but we have to wait and see, it would have its advantages and disadvantages. On the one hand, it is what has already been built; and the disadvantage is the royalty and another that the brand’s ear compares and has more the reference of the type of store in the United States. It will be necessary to see what happens with Sears in the USA and what they want ”, affirmed the manager.
Right now, Grupo Sanborns is accredited to use the brand name in Mexico, in about 97 units that operates in the national market, which have reported interesting profits for the business owned by Carlos Slim.
During the past year, Sears, represented 44 percent of the total sales of Grupo Sanborns, at the same time that it managed to position 4.5 million of its own credit cards, with which it remains one of the most important non-bank players in the country, according to the group’s financial report.
However, the history of the brand is different in the United States. In that country, Sears is now managed by the private company TransformCo. However, it suffers from the aftermath of a difficult financial situation that has led it to close several units.
The company has been closing stores, continuously and permanently, for the past few years. After losing $ 12 billion since its last profitable year in 2010, the brand had only to declare bankruptcy, around 2008 adopting a position from which it has not been able to fully recover. Store closures continued after Sears emerged from bankruptcy, suggesting that losses at the now private company had continued. By the end of February 2020 it had dropped to 182 stores.
Although the reality is exponentially the opposite, the evaluation of a name change for Sears in Mexico could be supported if we consider that we live in a particularly globalized world, where brands such as Sears with a presence in several markets cannot build a corporate identity and reputation of local way. In other words, what happens to the firm in the United States will irreparably echo in other regions where it operates despite being managed by other groups.
At this point, it is fair to mention that according to a survey conducted by BSI, 23 percent of consumers say that they would carry a company product if their reputation were within the average, a figure that rises to 39 percent when it comes to levels. strong reputation and 77 percent when reputation achieves an excellence rating.
This, as the Grupo Sanborns manager himself mentioned, has been an obstacle to growing the business beyond the end consumer’s point of view. Business and progress in the B2B field have been held back.
The truth is that deciding to change the name of the well-known stores would certainly be risky if we consider the positioning that the Sears brand enjoys in the Mexican imagination.
We are without a doubt facing one of those that could be among the most complex strategic decisions in history, where Grupo Sanborns must clearly put all the cards on the table so as not to lose a success story that it has formed around the brand. for several decades now.