Sears Holdings Corp. is turning to drive-throughs.

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Sears Holdings Corp. is turning to drive-throughs.
The retailer plans to create warehouse-like outlets, called MyGofer, where customers can pick up items they bought online without getting out of their cars.
Sears has received approval for a drive-through permit as part of plans to convert its 85,000-square-foot Kmart in Joliet, Ill.

The MyGofer will have a variety of products and brands and will open as soon as next month, Sears said in a statement. A Sears spokeswoman declined to elaborate.

The drive-through for the Joliet MyGofer will go where the Kmart's garden center now is, according to minutes of the City Council meeting where Sears executives discussed the plan in mid-December.

Sears sees the outlets as a "marriage between online shopping and bricks-and-mortar," city council members were told.

About 80% of the store will be devoted to storage. The other 20% is planned as a showroom and sales area, reminiscent of Service Merchandise Co. outlets in the 1970s and 1980s, where stock was kept in a warehouse and shoppers ordered on-site or picked up purchases.

MyGofer's layout is meant to reverse the general 80/20 percentage split between selling area and storage space.

Although MyGofer is currently positioned as a pilot store, Sears is already looking at expanding the concept, said Steve Sunderland, Sears vice president in charge of new store initiatives, according to the meeting minutes.

MyGofer is blending online retailing with a throwback to another era through the showroom-selling approach.

"It's very novel," said Jason Asaeda, retail analyst at Standard & Poor's Equity Research.
MyGofer "could be a more productive use of stores and probably cost less to run," Mr. Asaeda said. "But it would definitely need supportive marketing because it is a new concept."
The initiative fits with the tinkering ways of Sears Chairman Edward Lampert, whose hedge fund became the majority owner of Kmart in 2003, when he spent less than $1 billion and brought the company out of bankruptcy. Two years later Kmart acquired Sears, Roebuck and Co. in an $11 billion deal.

At their peak in April 2007, Sears shares traded for $193. In midday trading Tuesday, the stock was down 24 cents to $44.89.

Over the years, Mr. Lampert "has tried different product mixes and ways to make Sears and Kmart more relevant to shoppers," Mr. Asaeda said. "It's been a big job because there is a perception of Sears as a traditional retailer and Lampert has been reluctant to spend to support the efforts."

Sears is eyeing another site in the Chicago area for MyGofer, Mr. Sunderland said. He didn't disclose the precise location.

The Joliet MyGofer is near Sears's Hoffman Estates, Ill., headquarters, so executives can closely monitor its progress.

The conversion cost for the Joliet store is between $4 million and $5 million, and it is seen as potentially doing more business than the Kmart that is currently there, the Joliet City Council was told.

MyGofer would fit with Sears' growing online strategy. The retailer has been increasing the number of items it offers on its Sears.com site, with many products added over the past year. Some merchandise that is ordered online can be picked up at Sears stores, but MyGofer, if expanded, would greatly broaden the approach.

Sears, like other retailers, is struggling because of the recession, which is spurring steep price cuts for products. Retailers are seeing their profits and margins erode, while the deep discounts are failing to attract many shoppers.

Sears posted a 7.3% drop in December same-store sales amid a 13% decline at its domestic namesake stores and a 1.1% fall at Kmart. Sears did, however, boost its fiscal fourth-quarter earnings view to above Wall Street's estimate.

Sears and Kmart also have their own issues, including cluttered appearances at some stores and a disinterest in the kind of merchandise they offer.

"Their presentation and products do not stock up well compared to competitors," Mr. Asaeda said. "There is a sense they have not done enough to make the shopping experience enjoyable. Maybe MyGofer will help."

Credit: By Karen Talley