Why bigger is not better for retail

Washington

WITH holiday shopping in full swing, Sears decided it was time to host a "grand reopening" for its department store at Fair Oaks Mall in Northern Virginia, complete with magic shows, jugglers, face painting and free cotton candy.

The biggest change for the decades-old shopping centre anchor? It was now just half its size.

The store had done away with its entire second floor, concentrating its efforts on its appliance and mattress departments on the ground level. The apparel departments were smaller, and the store's many cash registers had been consolidated into one sleek, white checkout counter that looked like it'd been borrowed from the Apple store.

It had taken more than a year to renovate the store, part of a companywide effort to square a difficult retailing circle. Sears Holdings, which hasn't posted an annual profit since 2010, is trying to pare costs while making its stores attractive to a generation of shoppers wh…