Sears Comes To The Rescue Of Defunct Chrysler & GM Dealerships

February 22, 2010
Chevrolet dealership

Chevrolet dealership

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.

* * * * *

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

With over 3000 automobile dealerships that have lost their franchise, 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.  The new Sears Auto Center franchise locations will provide the same products and services for automobiles, light trucks and motorcycles that are currently available at the nearly 850 company-owned Sears Auto Centers. Those products and services include:

  • An extensive tire selection, including brands such as Michelin®, Goodyear®, BF Goodrich® and Bridgestone® and more
  • Batteries from DieHard®, America's most preferred automotive battery
  • Maintenance and repair services for consumer and commercial fleets, including: oil changes, alignments, shocks, brakes, coolant/antifreeze, air conditioning, transmissions, fuel system cleaning and more
  • Custom wheels, car care products, truck boxes, fluids, floor mats, DieHard battery chargers, DieHard portable power, XCargo® carriers and more

Additionally, many of the new franchise locations will be located on properties adjacent to pre-owned vehicle and body shop operations, making it even more convenient for customers to service their existing vehicle or shop for a new vehicle."The Sears Auto franchise is a win for customers and a win for dealers," said Bill Jackson, Senior Vice President of Sears Holdings Corp. and President of Sears Authorized Independent Auto Centers, LLC.  "For customers, Sears Auto Centers will be more convenient than ever, with more locations providing our full product and service offerings.  This is also a great opportunity for dealers who are currently selling used cars to gain a brand that's nationally recognized for quality and dependability, a resource for buying high-quality auto parts and supplies, and access to a proven business model that has been tailored to their needs."

"We're thrilled to join the Sears Auto Center network.  No other opportunity combined so many features that we needed as we sought to stabilize our business and position it for future growth," said Bill Kendall, of Coleman Auto Group.  "Already, we've witnessed the level of support and care that Sears has invested in our success.  And we are ready to work hard to leverage the strengths that Sears brings to our existing relationships with customers."

The new Sears Auto Center franchise model is available immediately to qualified dealers.  Sears will work with dealers to offer these advantages:

  • Strength of the Sears brand and the ability to leverage Sears marketing, web presence and social networking
  • Strength of the product brands, such as DieHard and Craftsman
  • The purchasing scale necessary to achieve superior pricing on:
    • Product (tires, batteries, parts)
    • Equipment
    • Supplies
  • Sears Card acceptance
  • Systems and processes

"We are creating an opportunity to leverage Sears Automotive's scale, business processes and brands so that dealers can build their businesses in service, parts and used vehicles," Jackson said.  "Our franchisees are great business people with years of experience in selling and servicing vehicles.  They have great facilities that need to be used to their fullest.  Together, we can provide each other a great opportunity to grow our businesses."About Sears Auto Center

Sears Auto Center is a leading provider of automotive maintenance and repair services and parts, with nearly 850 locations nationwide offering a full array of passenger and light truck tires, DieHard® batteries, Craftsman® auto accessories and more.  Sears has a long history as America's trusted place for car care, having offered auto parts since 1905 and service since 1931.  Sears Auto Center offers customers convenient locations and hours, as well as an extensive menu of services.  Sears Auto Center is a division of Sears, Roebuck and Co.

About Sears Holdings Corporation

Sears Holdings Corporation is the nation's fourth largest broadline retailer with approximately 3,900 full-line and specialty retail stores in the United States and Canada.  Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance.  Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands.  It also has the Country Living collection, which is offered exclusively by Sears and Kmart.  We are the nation's largest provider of home services, with more than 12 million service calls made annually.  Sears Holdings Corporation operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation.  For more information, visit Sears Holdings' website at www.searsholdings.com.

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