Craftsman's Business Plans

[BigBlackBlazer]

So everyone hates how Craftsman has moved their production from America to overseas. Im sure it's so that Craftsman can save money and make more profit. I just have one question about the business aspect of this:

Does anyone know how the company has been doing since they have moved production overseas? Are they making larger profits due to lower production costs, or are they losing too many loyal customers do to lesser quality products and personal issues with buying overseas.

I know most of us would prefer the higher quality American tools, however I know as a nation we prefer lesser quality things in general. I was wondering if anyone knew for sure how Craftsman/sears has been doing in recent years. Hopefully if they are not doing so good they will decide to move production back to the United States.

 

[TimDaToolMan]

I worked at Kmart and was in the same mall with Sears when they started to move production overseas.

They did not give any notice to the public about the COO switch, it was very sneakily done.

Also, the prices did not change, and people were paying the same money.

 

[Stuart in MN]

Go here: http://www.google.com/finance?q=NASDAQ:SHLD&sa=X&ei=ZQ1lVcX4HMTSsAWQ0IH4Aw&ved=0CBQQ2AE and you get a chart showing Sears stock prices. You can adjust the chart to show anywhere from 1 day to 10 years.

 

[tlpatter]

I would buy a lot more craftsman tools if production was still in the USA. I still buy there USA tools when I can get my hands on them at a resonance price. Many of the Sears locations in nearby cities have closed but the one in my town still is going strong with tool sales.... at least until the new harbor freight opens in a couple of months.

 

[sberry]

Production cost is not their problem. The blunder here was trying to chase Walmart and HF to the bottom when they should have been trying to move up to SK. Back in 80 you could buy Sears for 10 cents to the dollar compared to Snapon, today its 5 cents. How low can they go?,, This is great for consumers but Sears pizzed away a worldwide position as a leader in hand tools.

 

[Davefr]

So everyone hates how Craftsman has moved their production from America to overseas. Im sure it's so that Craftsman can save money and make more profit.

More profit?? Have you seen a Sear's income statement in the last few years??

Hint: They lost about a billion $ in the last year!!

 

[mbret2004]

Was talking to an older salesman at my local Sears and he was saying there has been some talk about moving Craftsman hand tool production back to the.USA.

Wishful thinking? Anyone else hear anything?

 

[sberry]

They cant make this back.

 

[CJM8515]

I went to sears the other day, one of the few things they sell that I like are their plastic socket rails. The tool section store LITERALLY had barely anything in it and had signs saying renovations. No tool case, no tools really, no power tools. How the F do they expect to sell anything IF THERE IS NOTHING?

I went back a week later..same thing..tool section is getting so sparse last few years its insane. Every once and awhile Ill stop in just to look and its sad really. I recall as a kid sears sold things, it was like walking into walmart-now they have literally clothes, bedding, barely any tools.

 

[PFSard]

More profit?? Have you seen a Sear's income statement in the last few years??

Hint: They lost about a billion $ in the last year!!

I haven't really been interested in Sears' income statement, but I'm curious if the various business segments are broken out as to profitability. As in "Are tools a profitable business for Sears?"

 

[Coach James]

The purpose of moving production to China is to improve profit margins. If they moved production to China and lowered prices, it would defeat the purpose for moving production in the first place.

Tools are just one of the problems at Sears. Their share of the appliance market has dropped from ~40% in 2005 to ~25% in 2013. The numbers in other retail areas show the same thing: Sears losing market share to competitors. Sears share of the female clothing market have been in decline for two decades.

Improving the profitibility of the Craftsman line will help, but Sears must regain market share if it is going to survive.

Coach

 

[Sanny81]

This pic is from 1989 and part of a bunch of pictures taken in shopping malls in that year....perfect for this topic.

 

[EdT]

Last time I looked, SEARS was losing something over a million dollars a day. With or without the Craftsman line and regardless of where it's made, how long do you think they can keep that up. From what I have read, the current long-term (now short term?) business plan is to go out of business and sell off all the company owned stores and other assets. I went to SEARS last year for a washer part (they had it) and I don't think there was another person in the store who didn't work there. Their section of the mall parking lot was wide open. It was sad. So, if you have anything that you need to warranty, I'd do it soon since a Chinese screwdriver is better than no screw driver.

 

[Coach James]

Was talking to an older salesman at my local Sears and he was saying there has been some talk about moving Craftsman hand tool production back to the.USA.

Wishful thinking? Anyone else hear anything?

Talk amongst the clerks maybe. Store clerks would be the last employees to know of a major change like moving production. When I worked in retail, news of major changes was guarded and kept secret like the ICBM launch codes.

Coach

 

[TimDaToolMan]

Sorry, but Sears Holdings (Sears and Kmart), is not going to survive, and most likely will be filing bankruptcy before 2020.

The CEO Edward Lampert is a ******* idiot. Kmart was having trouble since the late 90s, but piss more management ruined it.

Believe it or not, Kmart outpaced Walmart in Sales during the 80s. So badly, that even Sam Walton would visit Kmart stores to find out what they were doing better.

Walk into any Kmart, and it looks like 1997, that's how long it's been since a lot of stores were updated, many have not been updated at all.

Their POS system, which is actually better than Sears, is from 2002, and runs slow as ****, the sears one here was TEXT ONLY, no GUI.

I could literally write a book on all the **** ups over the years that ruined Sears and Kmart.

 

[CJM8515]

The bottom line is sears nor kmart followed the trends and updated themselves. Kmart had a HUGE store here. They closed it about a year ago, knocked it over and put up a new grocery store. If you went to kmart in the last few years no matter what day, time, or whatever it was nearly empty. There is an other huge store 20 miles from me, same ghost town. I can recall kmart was the best for a super center for awhile, now walmart has fully taken over that role.

 

[Squankum]

Oh, don't be silly. Sears doesn't have a plan.

_

 

[southalabama]

Was in a sears on Memorial Day. The larger power tools are disappearing. There is a board where you can look at saw and then order one. Apparently no inventory in the store.

Before our local kmart was closed inventory dwindled down. They'd stack Rubbermaid totes or paper towel boxes in large sections of the shelves. They simply couldn't afford to keep the place full.

It's called a death spiral.

 

[NeuseRvrRat]

The CEO Edward Lampert is a ******* idiot. Kmart was having trouble since the late 90s, but piss more management ruined it.

That "******* idiot" is worth $3.1 billion. Yeah, a real *******.

 

[Moose-LandTran]

However I know as a nation we prefer lesser quality things in general.

It's not that people prefer lower quality, they want lower prices. Same quality at a lower price, means a lesser profit margin. They don't want to decrease their profit margin, obviously.

You'd be surprised how few people actually take note of the quality of many things. As long as it does the job, they're happy with it. Not everyone seeks the quality we do, after all, a tool is a tool and for most people good enough is exactly that.

 

[NeuseRvrRat]

It's very hard for GJers to understand that China quality tools meet the needs and wants of the vast majority of Americans who will ever buy any tools, nowadays. For the slightly more discerning consumer, Taiwan quality is sufficient. Professionals are going to buy the high end stuff no matter what (and for good reason). Sears understands this. The typical GJ member is not Sears' target demographic. We are a very small segment of the total population of American tool buyers. Their decision to go overseas makes perfect business sense.

^exactly

 

[Velosprout]

The reputation that was once Sears/Craftsman, WeatherBeater, JC Higgens, Coldspot, Kenmore and Hillary is now squandered.

All of our home garden produce was canned or put up in Coldspot branded freezer boxes in Coldspot freezers. My first shotgun was a 16 ga. single shot J.C Higgens, and I camped with a J.C. Higgens propane lantern and fished with a Ted Williams Sears tackle box. And, everything we painted on the farm and home was using WeatherBeater paints. It has been hard to believe such well-known brands have or are disappearing.

Earlier this year I gave away my last Craftsman 1975 tool chest to my young nephew. Alll the tools I purchase new are Kobalt or Hitachi now. Other than a creeper, floor jack, scroll saw, bench grinder, and rototiller there is nothing Craftsman left in the garage.

 

[MilwaukeeFish]

It's very hard for GJers to understand that China quality tools meet the needs and wants of the vast majority of Americans who will ever buy any tools, nowadays. For the slightly more discerning consumer, Taiwan quality is sufficient. Professionals are going to buy the high end stuff no matter what (and for good reason). Sears understands this. The typical GJ member is not Sears' target demographic. We are a very small segment of the total population of American tool buyers. Their decision to go overseas makes perfect business sense.

^exactly

Quoted for truth. But...a couple of things: Taiwan being for the slightly more discerning consumer is only partially true. The average buyer could give a furry rodent's backside where something is made as long as it's cheap and gets the job done. Be it Taiwan or China or wherever.

Quite a few people would buy high end stuff if they could swing it financially. Very many can't. So they have to pick and choose how they allocate their resources. Taiwan is making a lot good tools now. No they aren't US quality but they aren't US prices either. Dollar for dollar a Taiwanese tool (think some Gearwrench stuff for example) is of a better value and quality per dollar than a Chicom Craftsman tool. Now if Craftsman offered US made tools again more than a few GJers would leave smoke hauling it to Sears.

The reputation that was once Sears/Craftsman, WeatherBeater, JC Higgens, Coldspot, Kenmore and Hillary is now squandered.

All of our home garden produce was canned or put up in Coldspot branded freezer boxes in Coldspot freezers. My first shotgun was a 16 ga. single shot J.C Higgens, and I camped with a J.C. Higgens propane lantern and fished with a Ted Williams Sears tackle box. And, everything we painted on the farm and home was using WeatherBeater paints. It has been hard to believe such well-known brands have or are disappearing.

Earlier this year I gave away my last Craftsman 1975 tool chest to my young nephew. Alll the tools I purchase new are Kobalt or Hitachi now. Other than a creeper, floor jack, scroll saw, bench grinder, and rototiller there is nothing Craftsman left in the garage.

Precisely. For a very long time Sears was the 800lb gorilla of catalog and retail sales. Even if you were in some little BFE rural community you could get a catalog to get stuff shipped. If you needed warranty on tools you waited until you made a trip into the city and took your tools in and got it swapped no questions asked.

Those days are long gone. Sears though has been trying desperately to continue operations as if the old way is still the way. Failing that they are desperately clinging to their old reputation. They have failed to update their business model and are getting it handed to them by the likes of Walmart and HF and Target and Meijers and Amazon and on and on.

So what does a business do when they are desperate because they are no longer the leader of the pack and quickly losing market share? Normally a business would try to reinvent itself and innovate themselves back to the top again. Sears didn't and I doubt they will. Simply for the reason that the damage has been done. If Sears was ever going to reclaim it's market share or at the very least stay respectable and keep a dog in the race with the other large retailers: it would have done so by now.

Sears [Craftsman] unfortunately has chosen to take a different approach and decided to join the race to the bottom. At least two problems with that. First, to really be a player in the downward move you gotta be willing to go cheap. Sears isn't. They offer Chicom **** at near the old US prices. HF is gonna eat their lunch every day, all day until that changes. Second, the race to the bottom ultimately never turns out well because there is no bottom. Only the abyss of insolvency. Sears has opted to milk it for all it is worth and then torch the carcass when they can't squeeze another nickel out of it.

 

[Flattie]

Wow BUY USA. Sure miss that. I was at WM the other day. USA is creeping back there. I only had to pay 59 cents more for a USA can opener

 

[zx2slow]

Its not a race to the bottom, its just pure survival at this point.

Best case scenario, Sears continues to implode and sells Craftsman, US company buys it and brings production to the US. Quality tools sold through multiple retailers and warranty continues to be honored.

Worst case scenario, Sears continues to implode and sells Craftsman, Chineese or investment company buys it. HF or Walmart now sell Craftsman tools, no warranty which is unfortunate as the wrenches seem to be made of scrapped Burmese soda cans.

 

[theoldwizard1]

Last time I looked, SEARS was losing something over a million dollars a day. With or without the Craftsman line and regardless of where it's made, how long do you think they can keep that up.

I have been asking myself that for a couple of years now ! I thought for certain they would close after last Christmas.

First, everyone needs to know that Craftsman never was a manufacturer of anything ! It is just a "brand". The tools were sourced from various places over the years. Most of my Craftsman tools are from the mid 70s through the mid 90s. All were made in USA and decent quality. I warrantied my flex head 3/8" ratchet sometime after 2000. Made in USA but definitely not the same quality.

Second, the Craftsman "brand" is no longer owned by "Sears". From Wikipedia

The brand is controlled by Sears Holdings, and owned by KCD IP, LLC, a special purpose entity created by Sears Holdings for securitization purposes. The name "KCD IP" is an acronym for Kenmore Craftsman DieHard intellectual property.

Some will saying that I am splitting hairs, but this is important if (when?) Sears ever goes "belly up" !

Third, back in 2013 KCD IP, LLC introduced the "Craftsman Industrial" line of tools. These are all made in the USA and NOT sold at Sears stores. They were meant to be sold at other, premium" tool outlets, most of which are online. No personal experience, but others on GJ say the quality is better. (The price is a lot higher !). Craftsman Industrial is NOT a "full" tools line up, but it does cover the most common hand tools.

2013 Craftsman Industrial Tools Catalog (Check the top menu, far right for download options.)

 

[Moose97]

I have been a Craftsman guy my whole tool using/buying life. All of my Craftsman (and that's 80% of my hand tools) are American made. There are 2 malls with large Sears stores (both always nicely stocked) within 50 miles of my house. I have been wanting deep 1/2 drive sockets for some time. Went to HF and they have 10 for 17 bucks. I went to Sears next door and they have a set of 9 for 52 bucks! Made in China! Had they been American made I would have bought them no questions asked. Instead I went back to HF and bought the SAE and Metric for the same price I would have paid for just 1 of the Craftsman. Sad day but that's what I could afford for a tool that won't see a ton of use. Hopefully someday soon Sears will sell off it's Craftsman line and it will come back to American production but I doubt it.

 

[AmishFury]

Walk into any Kmart, and it looks like 1997, that's how long it's been since a lot of stores were updated, many have not been updated at all.

when i walk into the only remaining nearby k-mart* i just get depressed... the place feels like a hospital room with someone on life support while the family is outside discussing their options... only without the hospital cleanliness


*used to be 3... one was a truly massive super k with full grocery, attached restaurant, etc... actually made the wal-mart across the street from it look tiny... it closed, the building was torn down, best buy and a few other stores now occupy the space

 

[-Hey_Now-]

Sears Canada has a few depot stores in Ontario. I get sick of thinking of those poor long-term employee's who get shafted. What happens to their pension/retirement.

More importantly, what happens when it costs too much to ship the goods from China to North America, will we get our production lines back up and running.

 

[theoldwizard1]

I have been a Craftsman guy my whole tool using/buying life. All of my Craftsman (and that's 80% of my hand tools) are American made. There are 2 malls with large Sears stores (both always nicely stocked) within 50 miles of my house.

4 within less than 20 miles. Closest is only about 2-3 mile away.

I have been wanting deep 1/2 drive sockets for some time. Went to HF and they have 10 for 17 bucks. I went to Sears next door and they have a set of 9 for 52 bucks! Made in China! Had they been American made I would have bought them no questions asked.

Shop eBay. You can frequently find new, Made in the USA Craftsman for reasonable prices.

Instead I went back to HF and bought the SAE and Metric for the same price I would have paid for just 1 of the Craftsman.

HF used to sell 2 different grades of impact sockets. One with molybdenum and one without. Only a couple of dollars difference, but this was a case of money well spent.

Hopefully someday soon Sears will sell off it's Craftsman line and it will come back to American production but I doubt it.

I would be shocked if that happened.

 

[RiverRider]

Was talking to an older salesman at my local Sears and he was saying there has been some talk about moving Craftsman hand tool production back to the.USA.

Wishful thinking? Anyone else hear anything?

I heard this myself from a small operator with an independent Sears outlet, probably about ten or eleven weeks ago.

 

[PelicanPines]

I built my house in 2005... I liked sears... so I went there to buy my appliances. After learning I would have to deal with 5+ different salespeople instead of just buying everything from one person... I left.

Went to a local mom & pop shop who had more appliances on their floor than all of sears. Spent close to $10k... that could have been in sears coffers.

The local Kmart here seldom has more than 1 or 2 people actually shopping in it. Can not understand how they stay open. The same story at my local sears now... a handful of people in the store shopping but 3 people work in the tool department.

Lifetime warranty? I'm pretty sure craftsman will splinter off within a few years when sears announces they will be closing their stores to dedicate themselves to online sales.

This is total speculation on my part... I just can't see them surviving much longer.

Update: Sears would never return to USA manufacturing... think about the warranty liability... everybody would return every single china tool for a usa one as defective since it's pretty much no questions asked.

 

[defektes]

Wow BUY USA. Sure miss that. I was at WM the other day. USA is creeping back there. I only had to pay 59 cents more for a USA can opener

That USA can opener kicks ***, I got a few and gave them to my parents and girlfriends parents that were complaining about Chinese can openers.

 

[defektes]

I heard this myself from a small operator with an independent Sears outlet, probably about ten or eleven weeks ago.

Oh and other people have heard this years ago, rumor, and wishful thinking from the associates.

The Sears I used to shop at when I used to buy Cman tools the guys there said the same thing.

 

[Flyordie]

I have been a Craftsman guy my whole tool using/buying life. All of my Craftsman (and that's 80% of my hand tools) are American made. There are 2 malls with large Sears stores (both always nicely stocked) within 50 miles of my house. I have been wanting deep 1/2 drive sockets for some time. Went to HF and they have 10 for 17 bucks. I went to Sears next door and they have a set of 9 for 52 bucks! Made in China! Had they been American made I would have bought them no questions asked. Instead I went back to HF and bought the SAE and Metric for the same price I would have paid for just 1 of the Craftsman. Sad day but that's what I could afford for a tool that won't see a ton of use. Hopefully someday soon Sears will sell off it's Craftsman line and it will come back to American production but I doubt it.

IF Craftsman breaks off.. They do have the capability to return to USA production. Danaher's MATCO Tool Division is still functioning. They can always go to SK too.

Personally, I wish Mitt Romney wouldn't have closed so many factories here in the US. They just closed the Kingsley Tools Plant in Texas... A loss of 250-300 direct jobs and thousands more in indirect job losses. All because they wanted more profit. Sad part is, Kingsley made DAMN FINE TOOLS. Their sockets (GK, K marked) Craftsman sockets were far better fit and finish than their G2 counterparts.

The even sadder part... all the equipment they have in the Kingsley plant... Is being pulled out, loaded in shipping containers and shipped to a location in Taiwan owned by Brookside Investments.

 

[bobbycos]

I have been asking myself that for a couple of years now ! I thought for certain they would close after last Christmas.

First, everyone needs to know that Craftsman never was a manufacturer of anything ! It is just a "brand". The tools were sourced from various places over the years. Most of my Craftsman tools are from the mid 70s through the mid 90s. All were made in USA and decent quality. I warrantied my flex head 3/8" ratchet sometime after 2000. Made in USA but definitely not the same quality.

Second, the Craftsman "brand" is no longer owned by "Sears". From Wikipedia



Some will saying that I am splitting hairs, but this is important if (when?) Sears ever goes "belly up" !

Third, back in 2013 KCD IP, LLC introduced the "Craftsman Industrial" line of tools. These are all made in the USA and NOT sold at Sears stores. They were meant to be sold at other, premium" tool outlets, most of which are online. No personal experience, but others on GJ say the quality is better. (The price is a lot higher !). Craftsman Industrial is NOT a "full" tools line up, but it does cover the most common hand tools.

2013 Craftsman Industrial Tools Catalog (Check the top menu, far right for download options.)

Just opened up the new Summit Racing Tools catalog and was surprised to see Craftsman Industrial tool sets for sale in it