Kmart blew a golden opportunity even though the retailer had the Martha Stewart Everyday® collection as a key element in its business and brand strategy. Kmart only thought of Martha Stewart as access to branded products to round out their offering. Target, on the other hand, developed a compelling value proposition and viewed the Michael Graves Design™ collection not only as access to a branded assortment, but as a potential silver bullet brand – a brand that significantly enhances the image of another brand through a partnership or other affiliation. The Michael Graves brand did, indeed, become the silver bullet that has enabled Target to position itself as the mass merchandiser with a designer twist.

Sears now has access to branded product, Lands' End's. Will Sears be savvy enough to evaluate the Lands' End brand as one with more value than solely that of a branded assortment that can be, in the words of Sears' Chairman and CEO Alan J. Lacy, “significant to the Sears' overall apparel strategy”?

Two strategic brand opportunities to drive value cannot be over looked by the Sears' and Lands' End's executive teams: 1) identify and evaluate potential silver bullet brands in the context of 2) an overall brand architecture strategy.

Executives should be uncovering potential “silver bullets” from the Lands' End portfolio that are tightly linked to the overall business strategy and pose opportunities to significantly enhance the image and relevance of Sears' brands. The need: To achieve what ThinkPad did in changing customer perceptions of IBM's clunky, big blue, mainframe brand, in the zoom that Miata brought to the Mazda brand, and in the game that XBOX brought to the Microsoft brand.

The Lands' End portfolio contains several candidates, starting with its Oxford Express® brand. This branded application finds the perfect shirt from 1,000 choices by specifying fabric, size, fit, sleeve, collar style and color. Access to the application in a Sears store could substantially increase square foot productivity (and thereby comparable store sales) while helping to position Sears as the authority in men's dress shirts. The Lands' End Custom™ and Lands' End Swim Finder branded applications could serve the same purpose.

Another possibility is the Lands' End branded service, Guaranteed Period®. Lands' End has been defined by its service. Sears has not. Sears needs to own the service promise that has been so deeply associated with Lands' End and is represented by Guaranteed Period®. It's critical the systems, procedures and policies are put in place to execute this branded policy. If it's poorly executed, the impact to the Lands' End brand would be disastrous – negatively impacting sales and loyalty through the Lands' End catalog and on its website and reinforcing the perception that there is no service in the Sears brand.

Developing the silver bullet brand strategy in the context of an overall brand architecture strategy is critical. This entails far more than just organizing the brands as individual performers. To truly optimize their value requires a dynamic framework that makes the most of their inter-relationships under a system of brands working together to drive clarity in the marketplace, with employees and in the investment community, and synergy and leverage within the company's portfolio.

Both the Sears and Lands' End enterprises have sizable family of brands consisting of:

• The Sears and Lands' End master brands;

• Such sub-brands as Lands' End Business Outfitters, Lands' End School and Sears Brand Central;

• Collection, product and “ingredient” brands such as Lands' End Alumni Collection, Supima® Towels, Super-T™ shirts, Cordura® nylon used in Lands' End's Lighthouse® line of luggage, and Sears' Craftsman and Kenmore brands;

• Co-branded relationships such as Lands' End and Major League Baseball;

The underlying issue to structuring this framework is this concern: What strategy will increase the value, and reduce the risk of value erosion from this new family of brands? Will the Sears and Lands' End master brands be explicitly linked? If so, how? Sears could be the “endorser” brand – Lands' End - a Sears Company, or Lands' End by Sears – similar to Travelocity, a Sabre company, or Courtyard by Marriott. Alternatively, they could be co-branded, similar to Eddie Bauer and Ford, or with one brand put in a driver's role – Sears Lands' End – similar to UBS PaineWebber.

The ultimate brand architecture strategy will be directly tied to Sears' need for its brand to represent more than just appliances and tools if it hopes to successfully compete with mass merchants Wal-Mart and Target; the “big box” category killers, Best Buy and Bed, Bath & Beyond, and other department stores.

To that end, Sears' best bet may be to go to market as Lands' End by Sears in the Sears' environment and marketing communications, leaving Lands' End as a stand-alone brand in its own environment. This would enable Sears to build brand associations that extend beyond appliances and tools. Further, Wall Street rewards brick-and-mortar comparable store and earnings increases more than catalog sales increases. The top priority should be the ability of the combined companies to drive value through Sears. The endorsement can be phased out when the Sears brand has developed the key associations and authority consistent with the business strategy to stretch beyond appliances and tools.

So, will Sears learn from the mistakes Kmart made and the savvy brand management Target has espoused to drive top and bottom line results? Will the executives understand how to drive a portfolio of brands to achieve clarity, synergy and leverage? One can hope. There's more value in this transaction than simply a distribution deal for Lands' End and a branded assortment for Sears.

Cathy Halligan (challigan@prophet.com) is a Director with the San Francisco office of Prophet (www.prophet.com), a consulting firm specializing in brand and business strategy. She has many years of executive level operating and marketing experience with retail, catalog and Internet companies.