Sears 2009 Annual Report Download - page 21

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•Attaining best in class productivity and efficiency. In 2009, we focused throughout the year on
delivering quality products and services to our customers in a more productive and efficient manner.
We delivered better results by focusing on product sourcing, supply chain efficiencies, franchising,
labor model optimization, and consolidation of functions. Year over year, our gross margin rate
improved 60 basis points and we reduced our selling and administrative expenses by over $400 million.
We will continue to optimize our resource management to narrow the gap between our productivity and
that of our competitors.
•Building our brands. We believe that our proprietary brands provide us with a competitive advantage
and we continue to explore alternative ways to enhance their value, especially the Kenmore, Craftsman,
DieHard and Lands’ End brands. During 2009, we launched a new innovative collection of our
Kenmore laundry products and introduced the Canvas collection from Lands’ End. We also launched
or expanded new footwear brands, including Protégé, and introduced a complete product line for the
home with the Cannon and Jaclyn Smith brands. In 2010, we expect to continue the update of our
Kenmore brand by launching new, innovative products in the cooking and refrigeration categories. We
also continue to look for ways to give more Americans more opportunities to purchase our brands, as
evidenced by an announcement early in fiscal 2010 to license the DieHard trademarks to a third party,
which will enable DieHard-brand power accessories and select products to be sold through other
retailers throughout the United States, Puerto Rico and Mexico. We also announced in early 2010 that
we will sell Craftsman and DieHard products through another domestic retailer beginning in May 2010.
•Reinventing the Company continuously through technology and innovation. We improved
convenience for our customers during 2009 by investing in technology. We also focused on becoming
more innovative across all business units as we improved the customer experience on our websites,
launched new mobile applications, including Sears2Go and Personal Shopper, and offered our
customers multiple forms of payment both in-store and online, including express checkout, PayPal,
eBillme, check electronification, and an expanded version of our successful Layaway program.
•Reinforcing “The SHC Way” by living our values every day. During 2009, we strove to improve our
work environment and our impact in the communities in which we live. We harnessed technology
solutions to increase real-time feedback from our associates and customers, which has had a
transformative impact on our culture and customer focus. We also made progress towards our
commitment to environmental responsibility by launching a corporate environmental sustainability
program and announcing a new sustainable paper procurement policy. Our community programs, such
as Heroes at Home, the March of Dimes, and St. Jude’s Research Hospital, continue to grow, all of
which are further evidence of a strengthened culture of excellence focused on customer service,
transparency and teamwork.
RESULTS OF OPERATIONS
Fiscal Year
Our fiscal year end is the Saturday closest to January 31st each year. Fiscal years 2009, 2008 and 2007 all
consisted of 52 weeks. Unless otherwise stated, references to years in this report relate to fiscal years rather than
to calendar years. The following fiscal periods are presented in this report.
Fiscal year Ended Weeks
2009 .............................................. January 30, 2010 52
2008 .............................................. January 31, 2009 52
2007 .............................................. February 2, 2008 52
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