Dive Brief:

• Sears Holdings Wednesday said it was changing up its physical-store strategy with a new, smaller appliance store that will open in Fort Collins, CO. The store, at  7,000 to 10,000 square feet, is a fraction of the more typical 138,000 square foot Sears store, the Chicago Tribune reports.

• The move marks an unusual chapter in the company’s recent history, which has been a story of store closings and aggressive cost-cutting. The retailer is losing more than it makes, and at a shareholders meeting Wednesday CEO Edward Lampert compared getting Sears to profitability to the U.S.’s difficulty in closing the prison at Guantanamo, according to Bloomberg. 

• Still, appliances remain a Sears forte, as has its omnichannel Shop Your Way program, which will be a major feature of the Fort Collins store, according to the Tribune.

Dive Insight:

Sears has been hanging on, thanks to the money it’s been able to wring from its vast real estate and well as spending restraints. 

Soon after a February announcement that it would close yet another 50 stores, Sears reported Q4 revenue declines of $796 million.

The aggressive cost-cutting—particularly ​its store closings and layoffs—​has been necessary but expensive in the short term. But there comes a point when cost cutting, including store closings, impede efforts to make real improvements, too.

After all, omnichannel retailers do need to be able to leverage their brick-and-mortar stores to reach customers. And the retailer’s Shop Your Way omnichannel program, which includes in-store and curbside pickup, has garnered praise from retail experts and customers alike, though it's unclear how much that is contributing to its turnaround

Sears seems to think it’s hit on a compromise: smaller stores that cater to its strengths. CEO Edward Lampert said that the company will likely add more of the smaller formats this year.

"We have and we will be trying a lot of things," Lampert said at a shareholders meeting, according to the Chicago Tribune. 

Sears is perceived among many analysts and observers as a sort of “dead man walking.” In February, the Tribune notes, Evercore ISI analyst Greg Melich said in February that Sears isn’t "viable as a retailer in its current form.” But Sears has been written off before. Two years ago Credit Suisse analyst Gary Balter said that when it comes to Sears, the Doors song “The End” is stuck in his head.