Knight Ridder Newspapers

DETROIT – Sears Roebuck and Co. plans to convert some stores it bought from Kmart and Wal-Mart last year into a new concept this spring.

The new Sears Essentials stores also will give shoppers a hint of what a merged Kmart and Sears will look like.

The Hoffman Estates, Ill.-based retailer said Tuesday it would introduce Sears Essentials, a midsize version of its Sears Grand concept, at 50 stores it acquired last year from Kmart Holding Corp. and six from Wal-Mart Stores Inc. The stores are in several states, including Michigan, California, Florida and Illinois.

The first 25 such stores will open this spring. The company plans to convert the bulk of 25 other stores acquired from the discount retailers to Sears Essentials as well, Sears spokesman Chris Brathwaite said.

Sears Grand is a standalone store that sells groceries as well as its usual merchandise on one floor, to compete more directly with Wal-Mart. These stores are large, averaging 160,000 to 210,000 square feet. That’s more than twice the size of a traditional mall-based Sears store with 91,000 square feet.

The new-format Sears Essentials stores are about 84,000 square feet, but will still sell pantry and convenience items, Brathwaite said.

Troy, Mich.-based Kmart agreed to sell the stores to Sears for $575.9 million in September. The deal was first announced in June, months before Kmart Chairman Edward Lampert said the discounter would acquire Sears on Nov. 17 to create the nation’s third-largest retailer with $55 billion in annual sales. The merger is expected to close in early March.

Sears decided to speed up the first half of the conversions by 60 to 90 days.

The stores will offer Sears’ major departments like apparel, appliances, lawn and garden and electronics along with new offerings such as pet supplies, pantry, health and beauty and household and paper products. Sears also plans to offer some services at the stores such as auto, optical and pharmacies. The stores also will have a central checkout and a racetrack design, meaning a wide aisle that goes around the entire selling floor.

“These stores will have the best of Sears tailored to the individual market,” he said.

The stores also will capitalize on Kmart’s expertise in categories such as pharmacy, pantry, household goods, health and beauty and other departments new to Sears.

But the combination does give some retail observers pause, particularly because of Sears’ entry into convenience and pantry goods.

“Does the world need another place to buy potato chips? You have a number of people doing that and doing it well … are they going to do it better or cheaper?” said Farmington Hills, Mich.-based retail expert Fred Marx.

“You want to hope this is a good salvation for Kmart and Sears. The question is can they sustain it at a time when so many other respected retailers like Wal-Mart, Target and Meijer already have their oars in the water?” he said. “Sometimes these things look better on paper.”

The stores will continue to operate as Kmarts or Wal-Marts. But once half the store is remodeled, Sears will introduce the new Sears Essentials name to customers. Sears did not say what the conversions would cost.

Sears now operates four Sears Grand stores in other states and has been pleased with their success so far. And more traditional mall-based retailers are opening stores outside the mall format including J.C. Penney.

Kmart also struck a deal last year to sell 18 stores to Home Depot Inc. for $271 million. Lampert gained control of Kmart during its Chapter 11 bankruptcy and is the majority shareholder. He also owns about 14 percent of Sears stock.