Sears 2011 Annual Report Download - page 21

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• Second, we are executing actions intended to unlock the value of our portfolio, such as our recently
announced real estate transactions that are expected to generate approximately $440 million ($270
million for Sears Domestic and $170 million Canadian for Sears Canada) in cash proceeds upon their
closing, which are expected to occur in our first quarter, as well as our announcement of plans to
separate the Hometown and Outlet businesses and certain hardware stores through a transfer to electing
shareholders to purchase an interest in these businesses. The Hometown and Outlet businesses and
certain hardware stores combined assets represent approximately $2.3 billion to $2.6 billion in SHC
revenue and between $70 million and $80 million in SHC EBITDA with $350 million to $400 million
in SHC net assets and $325 million to $375 million in SHC net inventory (net of merchandise
payables).
• Third, we are accelerating actions intended to drive our strategic agenda to become the leader in
Integrated Retail. Profound changes in technology are changing the entire retail landscape, the ways
customers shop and the way they live. Americans spend as much time today on the internet as they do
watching TV, and more time today on their mobile devices than they do with print media. Customers
are more connected and empowered than ever before. We are accelerating our actions to bring together
a unique set of technology and retail assets to deliver a seamless, integrated experience for our Shop
Your Way Rewards members and customers—at the store, online, and in the home. At the core of our
strategy we are building a deeply engaging membership program, called Shop Your Way Rewards.
We’re building technologies and a platform that we expect will allow us to have continuous
relationships with our customers.
• We launched our Shop Your Way Rewards program late in 2009 and continued to grow membership
and capabilities in 2011. The Shop Your Way Rewards program is intended to transition Sears Holdings
from serving customers to building relationships with members. We believe that Shop Your Way
Rewards will allow us to learn more about our individual customers and therefore position us to better
meet their needs. The Shop Your Way Rewards program will also enhance our ability to communicate
with customers digitally. Such digital communication tools present a new opportunity to personalize
our messages and make them more individually relevant. What the future holds for Sears Holdings is a
progressive re-shaping and deepening of our relationships with our members. Given the size of our
membership today and the breadth of our assortment, this is very compelling for our business model.
• In 2011, we invested several hundred million dollars in our customer experience across touch points.
We believe that our investments will deliver compelling benefits to our members, several of which are
already in the market, like return and exchanges of online purchases in 5 minutes or less; no receipt
required; great deals personalized to consumers’ interests; and assistance by associates with innovative
technology applications and devices to help find the right appliance or TV or tractor to fit our
customers’ needs.
• We will continue to invest in our online properties. By integrating our vast store network with our
online properties, we believe that Sears Holdings will succeed in the rapidly evolving retail
environment. The web and mobile platforms integrate shopping and marketing in a very different way
than stores and traditional media have in the past.
RESULTS OF OPERATIONS
Fiscal Year
Our fiscal year end is the Saturday closest to January 31 each year. Fiscal years 2011, 2010 and 2009 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
2011 .............................................. January 28, 2012 52
2010 .............................................. January 29, 2011 52
2009 .............................................. January 30, 2010 52
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