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Since last year, over 2,000 dealerships have been cut from the Chrysler and General Motors networks, and there's been a great deal of discussion about what to do for these businesses and their employees -- reinstatement? restitution? nothing at all? Today, things are moving forward with a congressionally mandated mediation process, but there is also another possibility for disenfranchised dealers, and, like Craftsman tools and Toughskins jeans, it comes from Sears.
In a nutshell, Sears is looking to expand its network of Sears Auto Centers, and to do so, the company has launched an Independent Sears Auto Center franchise program. Sears is encouraging former Chrysler and GM dealers to join the program and convert their existing or former sites into licensed Sears Auto Centers. Said the company: "Sears designed the new franchise program to help those dealers leverage their facilities by building a set of businesses around parts and services, over-the-counter merchandise, and previously-owned vehicle sales."
Sears currently operates just under 850 Auto Centers in the U.S., but interest in this program could cause that number to grow significantly. The first dealership to open an Independent Sears Auto Center franchise will be Coleman Auto Group of East Windsor, N.J. That site will open on March 27.
Sears cites a number of benefits for enrolling in the franchise program, including:
• The strength of the Sears, DieHard and Craftsman brands;
• The ability to leverage Sears marketing, Web presence and social networking;
• Purchasing power on tires, batteries, parts, equipment and supplies; and
• Access to the Sears credit card and the corporate systems and processes.
We know that many Chrysler and GM outlets would like nothing more than to return to their dealer networks, but becoming an Independent Sears Auto Center could be a great fallback option for those who make unsuccessful bids at arbitration -- or for those without the time/energy/resources to pursue that path. Separated from their Chrysler and GM affiliations, Sears ties disenfranchised dealers to a recognizable brand. It also links them to a nice profit center (i.e. service) and allows them to continue selling used vehicles. It's also a win for Sears, which has seen dwindling profits from its department stores as customers have drifted to upscale and online retailers.
Outsourcing isn't always the best path to follow, but in this case, it looks it could like a win-win for displaced dealers and for Sears.
Full press release below.
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Sears Auto Centers Introduce Franchise Business
Signs Coleman Auto Group as First Independent Franchise
HOFFMAN ESTATES, Ill., Feb. 18 /PRNewswire-FirstCall/ -- Sears Holdings Corp. today announced the launch of a new strategic initiative for the Sears Automotive business. The Independent Sears Auto Center franchise program offers automobile dealers the opportunity to operate licensed Sears Auto Centers, bringing the Sears brand, buying power, distribution network, systems and corporate support to automotive aftermarket businesses. Coleman Auto Group of East Windsor, New Jersey, is the first dealership to take advantage of this opportunity and will open a Sears Auto Center in March 2010. Coleman Auto Group is utilizing a space formerly dedicated to its Chrysler dealership.
Grand opening date: March 27, 2010
Location: Coleman Auto Group, 917 Route 130, East Windsor, NJ 08520