Dive Brief:

• The new Sears unveiled a fresh logo last week as part of a rebranding effort as the department store retailer tries to shake off the negative publicity around its bankruptcy filing last fall and the troubled years that preceded it.
• The new logo received mixed reviews. Media and social media users pilloried the logo for its similarity to that of vacation rental platform Airbnb. According to media reports, Sears said on Facebook that the logo was made to represent "a home, embrace and heart" and that "it represents everything you need to build a home and a life you love!" The post appears to have since been deleted.
• Sears has recently opened a handful of new Home & Life store concept locations and made other moves to inject new life into its brand. The retailer, controlled by Eddie Lampert, has also worked out a new three-year, $800 million loan from a group of lenders to refurbish and operate its remaining stores, according to The Wall Street Journal.

Dive Insight:

The sale of a stripped-down Sears to Lampert in bankruptcy is premised on the hope that the chain's remaining stores and customer base is strong enough to be profitable — that at least a more modest Sears is better off alive than dead.

Time will tell if that remains true over the long run. For now, Sears' rebranding, loan and new stores — as well as new Craftsman and DieHard lines — represent efforts to make good on what's left of the business. But snarky and confused customer reactions over the logo change show the predicament that Sears, and other retailers like it with legacy brands and business models, face.

The retailer's customer base has drastically shrunk over the past 10 years, and began dwindling long before that. But moves to win new, younger customers risk alienating existing shoppers. Fellow department store retailer J.C. Penney ran into similar troubles when trying to chase younger shoppers.

Gymboree also attempted a rebrand and fashion shake-up in its offerings after it exited bankruptcy, as Sears is doing now. The challenges it faced are different from the department store chain's, but its case is still instructive. In Gymboree's case, its customers balked at the style changes, competitors pounced and ultimately Gymboree reentered bankruptcy, where it wound down its retailer operations and sold off its brands.

The debtor in its ongoing Chapter 11 case has sued the "new Sears" (dubbed Trasform Holdco) for $57.5 million it says it is owed from the sale for alleged contract violations. The old Sears has also alleged that Lampert and his hedge fund, ESL Investments, stripped billions of dollars in assets from the company, which Lampert and ESL have denied.

And that new Craftsman line of tools? It's the target of a lawsuit by the Craftsman brand's current owner, Black and Decker, which bought Craftsman from Sears in 2017. The suit followed the release of the new line and statements from Sears executive Peter Boutros describing the retailer as "the real home of the broadest assortment of Craftsman" products.