Dive Brief:

• Transform, the holding company that owns the remaining Sears and Kmart stores, has partnered with two supply chain companies, Li & Fung and Triburg, to "provide the company's apparel business unit with innovative global sourcing practices." Transform, dubbed "new Sears," did not specify any terms of the partnerships in a press release this week. 
• Transform and its partners named trend analysis, end-to-end visibility, data analytics, cost optimization and 3D technology as some of the capabilities they plan to realize through the partnership.
• Transform said the two companies will act as "sourcing agents and design partners" for apparel brands at Sears and Kmart. Goals include reduced lead times and greater efficiency in bringing product to market.

Dive Insight:

"Old Sears" has long had a rocky relationship with its upstream supply chain. The retailer sued a number of its suppliers and was embroiled in payment disputes with its suppliers leading up to its Chapter 11 bankruptcy filing. The retailer owed millions of dollars to vendors such as Whirlpool, Electrolux and Black & Decker.

The outstanding payments eroded trust between the retailer and its suppliers, and many suppliers turned to other channels to sell their wares. Whirlpool and Sears ended their relationship in 2017, and Electrolux previously told Supply Chain Dive it was "growing its business with other customers" as Sears' bankruptcy filing unfolded.

New Sears must overcome the tarnished reputation of its namesake — among consumers and industry partners — and regain trust from vendors critical to apparel brands at Sears and Kmart. Working with "sourcing agents" could be a way to rebuild supplier relationships. 

The holding company must also confront operational issues left behind by old Sears. The new retailer alleges the old retailer failed to deliver inventory, receivables, property and other assets.

In addition, new Sears faces the same headwinds as many other companies that import apparel: tariffs in the ongoing U.S.-China trade war. 

"With increasing volatility in the global trade environment, it's vital to have a supply chain that is more nimble and flexible while simultaneously opening new avenues for managing product costs," Greg Ladley, member of the Office of the CEO at Transform, said in a press release.

No doubt new Sears faces an uphill battle to grow Sears' and Kmart's business. Partnering with solutions companies that promise visibility, cost optimization and real-time data in sourcing could prove advantageous to new Sears, if its partners deliver on and execute those promises — and if new Sears upholds its end of the bargain with timely vendor payments.