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Medford Sears weathers the retail storm

When Sears opened its doors in the fledgling Medford Center 60 years ago, the retailer was the envy of the Rogue Valley.

Downtown was cluttered with stores of every kind, car lots and not a lot of parking spaces.

The Medford Center, a stone’s throw — and short walk — from the downtown corridor, had both parking and pizzazz. Rogue Valley Mall wouldn’t figure into the retail equation for another quarter-century, and the freeway under construction was a pipeline for newcomers.

The Medford store was a consumer magnet for miles around and did its part in making Sears “Where America Shops.”

Retail has been shaken to the foundation during the past two decades as Amazon and other online merchants have reshaped how America buys.

Sears Holdings — the parent company of Sears, Roebuck and Co., and Kmart — hasn’t turned a profit since 2010. It has relentlessly whacked away at stores and even some of its iconic brands in an effort to restore profitability to the storm-tossed retail sector. The Hoffman Estates, Illinois-based company slashed its store count in half during the past five years. The company operated 1,980 stores in 2013, but just 1,002 stores in early February. Another 103 locations are shuttering this month, and two dozen more set to close by July.

For a variety of reasons, however, the Medford Center Sears has stayed clear of the flailing financial blades.

“From a very simplistic perspective, staying above certain volume levels help determine profitability or success,” store manager Mike Beugli said Monday. “We’ve got a long history and culture here, and that benefits us. There are a lot of people who are very loyal customers that are rooting for us to win.”

In his 15 years at the helm of the Medford store, Beugli has seen major operational shifts — and changes in what the store sells. Through it all, the core of well-trained staff has weathered the changes.

“The other piece of the equation is that a lot of customers in our community still have a Sears card in their wallet,” Beugli said. “So that certainly helps.”

The ability to sell high-end appliances, retain the lawn-and-garden customer, attract fitness buffs — and more recently, the mattress buyer — has kept the Medford store profitable.

Many of the same people have joined the Shop Your Way customer loyalty program, of which Medford ranks in the top 20 percent nationwide.

The Medford Sears has a staff of 65 today, although it builds during the holidays. Historically, Beugli said, employment peaked around 120.

Hiring and training associates are as important as finding what the customers want.

“The right mix has helped us become much more competitive as profit margins have been harder to come by,” he said.

Counter-top appliances, electronics, luggage, bedding and sewing machines are gone, furniture and mattresses are in.

Mattresses range from entry-level to $4,000 adjustable-base units.

“I was pretty concerned when the company wanted to put in a huge mattress section, because I saw the competition all over the place,” Beugli said. “But it’s the fastest-growing department at Sears today.”

The online element has actually been a boon for the store, he said, accounting for about 10 percent of unit sales.

Last Thanksgiving, when the staff reported to work for a 6 p.m. opening, there were 150 online orders for the store to fulfill.

“It was everything from fine jewelry to tool sets, sleepware, vacuums, microwaves and all kinds of things,” Beugli said. “Instead of coming down and standing in line for door busters, the customers got the same prices and were able to shop from home. It’s a major shift, but our store still got the credit.”

While many of the failed Sears stores were in saturated retail markets or located in high-rent districts, the Medford store hasn’t had the outside pressure.

“Sears has been challenged largely with competitive issues,” said University of Oregon economist Tim Duy. “In bigger metro areas there are so many more options — or more Sears.”

Medford’s demographics have also played into Sears’ hands.

“A lot of the retail market has gone either downscale or upscale,” Duy said.

Medford Center’s $22.2 million purchase by LBG Real Estate of Los Angeles from Kimco Realty in 2014 was fortuitous, as well. The new owners have poured millions into the property and are in the midst of erecting a “Sears Tower” on the southwest corner of the store.

David Tally, a regional consultant who makes his living analyzing and tweaking small business, said the Medford Sears has the advantage of a long-term relationship with a community.

“It’s an anchor tenant with a brand name that has been around for a while,” Tally said. “It’s in a small community and has a pretty good performance record.”

Reach reporter Greg Stiles at 541-776-4463 or gstiles@rosebudmedia.com. Follow him on Twitter at www.twitter.com/GregMTBusiness or www.facebook.com/greg.stiles.31.

Store manager Mike Beugli makes sure the sales floor in the appliance department in the Medford Sears is in shape Monday afternoon.