Last month, Sears unexpectedly dropped a bombshell announcement on Wall Street. The retailer, known for its tools and appliances, hadn't had much luck persuading consumers to
come see its softer side. So, it announced it would be acquiring a softer side consumers already knew and loved. Lands' End, known for its casual apparel - not to mention its
appeal to a deeper-pocketed demographic - was the surprising target of the acquisition.
With the same quiet calm that characterized the announcement, Ron Culp, SVP of public relations and government affairs for Sears, shares his experiences communicating around
the acquisition with PR NEWS.
PRN: Tell us a little about the communications department at Sears and how it functioned during this announcement.
R.C.: Our department includes public relations, communications and government affairs. It consists of 42 staff members, divided into four functional departments: external
communications, which includes media relations and reputation management; corporate communications, which does internal communications including our intranet and in-house videos;
business communications - each business area has a single person assigned for marketing-oriented PR to promote that business line and its products; and government affairs, which
handles state and regulatory issues.
Interestingly enough, all four functional areas were involved in the announcement. We worked with management at Lands' End and Sears, as well as the outside legal counsel to
make sure timing was coordinated.
PRN: Getting the messages out to internal stakeholders is always key with an M&A. How did you handle that?
R.C.: The key was that internal audiences heard it first from the companies. That was our mission, and we were pleased that we were successful in doing that. We announced it
first thing in the morning, and at the same time the press releases were issued, the news cascaded quickly throughout the organizations. Our CEO and chairman flew to [Lands' End's
Wisconsin headquarters] and talked to more than 3,000 employees gathered there to explain what our plans are for growing the business.
PRN: Getting the message right with internal stakeholders is also critical. What did you do to ensure communications to all employees struck the right chord and hit on key
messages?
R.C.: [Lands' End's] organization is recognized in Fortune as one of the 100 best companies to work for. We told employees that we're going to let Lands' End be Lands' End;
we're not going to go in and do a massive restructuring. Our HR people are working with theirs to find out how to get to some of the employee attitudes they obviously enjoy.
PRN: What is your department doing to play a role in that employee communications equation in the long-term?
R.C.: We have taken one staffer and assigned her to the integration team. She and three other people from the finance area, HR and PR are serving as the Sears integration team
to ensure that everything runs smoothly. Her job is to work through her boss and myself to make sure [the integration team] gets the communications support they need. Our game
plan when we announce the closing is to have our CEO do a fly-around to visit all Lands' End employees at all five locations.
PRN: How are you working with the communications and human resources folks at Lands' End?
R.C.: Their commitment to [communications] mirrors ours. Our core PR team consists of five people, and they went to the Wisconsin headquarters a couple of weeks ago to start
the planning process [for ongoing communications and integration]. Last week, five of their people came to Hoffman Estates, [Ill., the Sears headquarters]. They're all talking
constantly and making sure we coordinate and stay on the same page with everything.
PRN: Some skeptics think this acquisition will be a bad move for Lands' End - that the company will lose its high-end shoppers who won't want to buy from a retailer owned by
Sears. How have you dealt with that concern with the press and other external audiences?
R.C.: The interesting thing for this acquisition is it's all about growth: Can we find ways to promote their business? They're successful, doing very well profit-wise. The
story is about the growth opportunity they bring to Sears [and the growth opportunity we bring to Lands' End]. They pick up 900 Sears stores, and the Lands' End customer who shops
at Sears for our hard lines - refrigerators or tools - but will not stay for our apparel, will now stay in the store [for the Lands' End apparel].
Overwhelmingly, the response has been in support of the logic of the merger of the two companies. Out of 6,000 to 7,000 customer emails and letters both companies have received
so far, there are about 300 people who have said, "Why did you do this to my Lands' End?"
It's our mission to assure them that their satisfaction with Lands' End will remain the same. The catalog and online offerings will remain the same; what will change is that a
selection of merchandise will be available in Sears stores starting this fall. But it won't be the complete line of Lands' End products; it will be basic, casual, classic apparel.
You're not going to see a $310 cashmere sweater you'll see in the catalog.
PRN: How much has your media volume gone up since the announcement?
R.C.: The first week was a media frenzy, and our head of media relations had a long-planned vacation. Her No. 2 stepped in for her. The first day of the announcement we had
200 media calls, and 100 in the following days. The number of calls has fallen, but they are still up [from the norm].
(Contact: Ron Culp, 847/286-5703)
The ABCs of M&As
Sears and Lands' End have generated a relatively positive response from the press and consumers regarding the $1.9 billion cash acquisition, largely owing to a strong
communications program focused on the basics:
- Blasting the Benefits. The two companies have pushed the message that the acquisition provides growth opportunities for both. They've minimized skepticism by citing
positive responses from consumers. - Focusing on Employees. Employees were and continue to be a priority for communications, with the CEO of Sears making himself available to Lands' End employees on the day of
the announcement. Culp and his team made it a priority that employees heard the news first from their employers. And communicators also explained to Sears employees the
repercussions (or lack thereof) of the acquisition for them. For example, Lands' End employees enjoy certain high impact benefits that did not translate to Sears' operations. "We
have to compete in a different market," Culp explains. - Maintaining the Brands. Sears is pushing the message that it will continue to operate the Lands' End Web site and catalog and that the apparel line in its stores will be
limited to lower-end garments. Well-heeled shoppers who value Lands' End's tonnier items get the message that the brands remain distinct.