Sears to eliminate 4,900 salaried positions
Wednesday, October 24, 2001
AP Business WriterCHICAGO (AP) -- Sears, Roebuck and Co. said Wednesday it is eliminating 4,900 salaried jobs over the next 18 months and revising its merchandise offerings as part of a cost-cutting overhaul.
The announcement came as Sears reported a slight gain in third-quarter earnings and outlined a new strategy that moves the retailer further from a traditional department-store company and closer to a discount store.
The nation's fourth-largest retailer, has been losing ground in recent years to such discounters as Kohl's and Target.
As part of the changes, Sears is making its biggest job cuts in eight years.
Some 1,300 positions will be eliminated at Sears' headquarters in the Chicago suburb of Hoffman Estates by the end of 2002. That will result in a cut of nearly 19 percent of Sears' 7,000 headquarters employees.
Another 3,600 positions will be cut from Sears' field organization for its full-line department stores. The field organization, which employs 15,000, consists of district and regional offices around the nation that supervise the retailer's 860 department stores.
The overhaul was designed by chairman and chief executive Alan Lacy, who took over the company a year ago from longtime Sears head Arthur Martinez.
"Our new approach to merchandising reflects a distinctive competitive positioning, a clear emphasis on home and family and a lower-cost operating model," said Lacy, who was meeting with retail analysts in Chicago on Wednesday to discuss the changes.
The new strategy, he said, "will substantially improve Sears' financial performance by creating an easier shopping experience for our customers while operating with greater focus, speed and efficiency."
Instead of abandoning Sears' long-struggling apparel business, which Lacy acknowledged earlier this year he had considered, the company will put an even stronger focus on it. Merchandise will be upgraded, the depth of its assortments will be improved and the company will move to a single proprietary casual brand for its men's, women's and children's clothing.
Sears also is eliminating "less productive" promotional activity, allowing it to invest more heavily in marketing the Sears brand.
Under Lacy, Sears this year already has closed 89 unprofitable stores, stopped selling cosmetics, sold its pest control business and ended some underperforming product lines such as bicycles and basketball gear.
Quarterly earnings, meanwhile, narrowly exceeded expectations despite the decline in shopping after the Sept. 11 terrorist attacks. Same-store sales fell 6.7 percent last month compared with September 2000.
Net earnings were $262 million, or 80 cents a share, down from $278 million, or 81 cents a share, a year earlier. That was a penny better than the consensus per-share estimate of analysts surveyed by Thomson Financial/First Call.
Revenues gained 1.7 percent to $9.75 billion from $9.59 billion.
Sears shares closed trading Tuesday at $37.79 on the New York Stock Exchange, up nearly 9 percent this year.
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