Sear Outlet Stores Face Conundrum

What comes first - sales of new product or sales for outlet stores? That's really the conundrum facing Sears Holding Company as it grows the Sears Outlet stores across the nation. How do you maintain stock levels in outlet stores if you don't have enough "scratch & dent' to go around?

Prices are great in Sears Outlets where washers, dryers, refrigerators that have gone out to someone's home and come back are being sold. These items have been rigorously tested and then sent to what may be referred to as a "hub" store of the chain in a metro or regional market. Once there the "hub" store sends out excess items to other stores it's responsible for stocking. There's the rub - at least as far as the "spoke" stores are concerned. Inventory is a crap shoot. Oh, you might have enough washers in total - just not the right ones. Too many large capacity in a predominately renter/single neighborhood for example. And do you think the "hub" store cares if the "spoke" stores make their sales? Doubtful.

Now, at the even bigger picture level, what happens when sales at top level Sears stores slow down - say in an economic downturn? Not enough going into the pipe means not enough coming out of the pipe for the outlet stores. Makes you wonder just how many is too many doesn't it?