The
Softest Side of Sears
Discounters and High Fashion Rivals
Have It in a Squeeze
De’Ann Weimer
Business Week, December 28, 1998
Sears, Roebuck and Co.’s CEO Arthur Martinez may be
short on Christmas cheer this year. As rivals report robust sales growth, Sears numbers
have dipped fall for four months. On Dec. 2, Sears warned that 1998 profits would be below
forecasts, the second such warning in three months. Its shares have tumbled from a
February high of nearly 64 to around 41 -- a drop of 35 percent. Is Sears turnaround
stalled?
Not according to Martinez,the former Saks Fifth Avenue
executive, who took over in 1995, has transformed Sears from a relic into a retailing
powerhouse. He closed outlets, bagged the Sears catalog, and, with the "softer side
of Sears" campaign, made Sears more like other department stores -- fewer tools and
more apparel. The results ten months of double-digit sales growth.
Losing steam -- but Martinez hit a speed bump in 1997 when
bad credit accounts ballooned, raising questions about the link between strong sales and
easy credit. When Sears tightened credit, sales slowed.
Now the problem seems to be Sear’s Softer Side strategy,
which is losing steam in the face of competition from both discounters and more
fashionable stores. Sears "is back in that squeeze between the traditional department
store and the discounter that offers better value," said Richard L. Church , a retail
analyst at Salomon Smith Barney. "It's a hard place to be".
Martinez says the way out is to tilt toward discounters.
Kohls, Target, and Wal-Mart have done a better job of improving product and are more
credible on pricing," he says. The softer side focus on apparel "restored the
credibility of Sears" for female customers, he says. Over five years, revenue from
apparel rose from 4 billion to 9 billion. But now, Sears must "send a stronger value
message to our customer," he adds.
That message, Martinez predicts will produce double-digit
earnings growth by the end of 1999. But analysts are wary. Stephen Kernkraut of Bear
Stearns Company warns "they are going to have to strike the right balance."
Other stores have found that difficult. Montgomery Ward and Co, now trying to work its way
out of bankruptcy, learned it couldn't beat discounters at their own game. So, too, did
Venture Stores Inc. period, which went into bankruptcy in 1998. "Sears can't be
everything to everybody," says Maxwell Sroge a retail consultant who works with
Sears.
Sears isn't giving up its fashion ambitions. On Oct. 5, it
announced a plan to sell merchandise from Bennetton Group, which has only sold through its
own stores in the past.
Complicating Martinez’ plans is the loss of top talent
from his turnaround team. On Dec. 4, John H. Costello creator of the softer side adds,
left for Republic Industries Inc.'s Auto Nation USA-- the sixth key executive to depart
this year. After two years of lackluster performance, Sears raises and bonuses are down.
Concedes Martinez who got no 1997 bonus "they all left for significantly better
situations than I could offer in the short-term."
When will the situation improve? There are some good signs.
Old standbys such as craftsmen tools and Kenmore appliances are climbing. And Martinez is
counting on services such as pest control, appliance repair, and carpet cleaning to
improve Sears outlook. These new businesses however, don't yet contribute much to earnings
which are now expected to come in at 1.27 billion. "They have been talking about home
services for the last three years," says Kerncraut. "It would be great if it
works but they haven't been able to do it yet."
Ever the optimist, Martinez is looking forward to 1999 and
the payoff from his new value strategy. Investors can only hope it works.
(Surprise! The long term strategy is markdowns
and pest control. Editor)
This Christmas is Anything but Merry at Sears
Lisa Morrell
Crain's Chicago Business
December 21, 1998
Sears, Roebuck and Co. Chairman Arthur Martinez and his 5,600
Hoffman Estates headquarters employees are headed for a post-holiday hangover.
Sears is closing out the year amid weak fourth-quarter sales
-- hit by a one-two punch of its own merchandising problems and unseasonably warm weather
that's driving an industrywide sales slump.
In response, Sears will implement a revenue- boosting game
plan -- adding products and brands and strengthening its private-label offerings in the
new year. But while those plans take hold, Mr. Martinez will confront more immediate
pressures to cut costs and tighten operations.
A prime target for cuts: Sears' Hoffman Estates headquarters,
where the number of employees has ballooned 40% to 5,600 in the last six years.
The crunch comes after Sears announced that earnings will
grow an anemic 1% to 3% this year -- well short of Wall Street expectations for a second
straight year.
This time, instead of credit losses blamed earlier, the
company cited weakness in its clothing sales -- a business that is at the heart of Mr.
Martinez's now-stalled "Softer Side of Sears" comeback strategy.
Meanwhile, Sears' star has fallen on Wall Street. Its stock
is trading in the $41.50 range, down about 35% from a 52-week high in June -- and not much
higher than when Mr. Martinez succeeded Edward Brennan as CEO in 1995.
"There's got to be concern there by executives on what's
going to happen," says Arthur L. Steinberg, president and CEO of retail and consumer
products consulting firm Greenhouse Inc. in Chicago. "If you have two years running
where you've missed expectations, you can't afford a third year."
And though Mr. Martinez declined to be interviewed, Sears
responded to written questions about its declining performance.
"We continue to pursue the right strategic paths,"
the response notes. "We need, however, to clarify and communicate better Sears' value
proposition in its apparel business. It is not well-understood by the consumer."
Compounding Sears' problems is a recent exodus of top
managers. Five of Mr. Martinez's dozen lieutenants have left Sears in the past year,
including his top marketing guru, top administrative officer and chief financial officer.
(Most of those positions have since been filled.)
The departures have only complicated a rough retail
environment. Analysts blame a stale apparel mix for a large part of Sears' fourth-quarter
problems. November brought the fourth consecutive month of same-store sales declines --
down 3.6%, instead of the 2% increase Sears had forecast.
Part of Sears' problem is that the engines that drove an
initial turnaround -- conversion of in-store storage space to selling space and the
addition of new credit card accounts -- have run their course.
"Those easy, low-hanging-fruit-type of gains are over
and now they have to take their business to the next level," says Todd Slater, retail
analyst with Lazard Frères & Co. in New York.
Sears has added more than 9 million square feet of retail
space since 1993, to bring its total to nearly 72 million square feet. But a key strategy
to expand its franchise with free-standing "off-the-mall" specialty stores in
areas such as auto supplies and furniture was unsuccessful, and the stores were sold.
Its remaining NTB National Tire & Battery and Sears
Hardware stores face stiff competition.
On the credit side, growth also has slowed. Between 1993 and
1996, Sears signed up 24 million new credit card holders, which boosted sales. But after
credit chargeoffs skyrocketed, Sears cut its new card offerings to 4 million new accounts
a year for this year and next.
In addition, the company took a $320-million after-tax charge
last year to cover legal expenses associated with illegal debt collection practices among
consumers in bankruptcy proceedings.
Sears' answer appears to be a focus on its core businesses,
more than 840 full-line department stores. But it needs a fresh approach for its
merchandise and advertising.
"They have stuck with what worked too long," says
Prudential Securities analyst Wayne Hood in New York.
To boost performance, Mr. Hood expects Sears to add lines
such as plastic storage products in January and new china, glass and flatware by midyear.
He also expects Sears to remodel 10 fewer stores than planned
-- a total of 40 next year -- and use the extra money for improving retail brands. Sears
is adding a mid-priced Benetton clothing line and Vanity Fair lingerie on the apparel side
and Krups appliances to its hard-goods departments.
Sears also is expected to make additional investments and
boost promotions around private-label brands, such as Canyon River Blues and Fieldmaster
apparel.
Results, however, will not come overnight. And if Mr.
Martinez hopes to boost profits -- and Sears' stock price -- cuts may be inevitable.
Already, analysts are increasing estimates for overhead and
expenses as a percentage of sales for 1999. And that takes a bite out of profits, further
straining Sears' performance.
That may be a harbinger of bad news for workers at the
Hoffman Estates headquarters, where Sears relocated from the Sears Tower in the fall of
1992.
Since then, the employee roster has grown significantly as
Sears added staff for new functions and businesses, including a product development
department and its tire business, and relocated functions such as logistics services, a
spokeswoman says. In the last year, Sears opened a five-story addition to its headquarters
to reduce office overcrowding.
On its current sales track, Sears' expenses appear to be
under control. For the year's first nine months, its domestic selling, general and
administrative expenses came in at 20.5% of sales, a decrease of 10 basis points from the
year-earlier period.
Says Prudential Securities' Mr. Hood: "If it becomes
difficult for them to drive revenues, then I think they will look for ways to tighten
down."
(C)1998 by Crain Communications Inc
The Enthusiasm, the
Action, and the Flavor of the NARSE.
These two articles were inspired by the demonstration outside of the Oak Brook
store on Wednesday, Dec. 9. Three different crowd estimates were used by reporters and
Sears spokesperson, Paula “You are Burdens” Davis. For your accurate
information, the wife of a Sears retiree took the time to count 115 noisy participants. We
thank George Ohare and NARSE and 115 members of our retiree family who thought that the
return of life insurance to their families was worth their time and effort......in mid
December when demands on their time and attention are at a yearly high!
Sears Retirees
Protest Cut in Benefits
Daily Herald,
December 10 1998
Retirees above Sears ,Roebuck and Co. estimated that more
than 200 people showed up at some point Wednesday at the Sears store at Oak Brook center
to protest the retailer’s cut in their life insurance benefits.
The retirees have been engaged in a year-long struggle to
overturn the decision and are pledging to picket stores across the country during the
Christmas shopping season.
The National Association of Retired Sears Employees now
claims 50,000 members in 250 cities. Its efforts are not restricted to protests, however,
as a class action suit is pending.
A Sears spokesman said the number of protesters was closer to
75 and reiterated that Sears has no plans to restore life insurance benefits to their
original levels.
Angry Retirees
Protest for Life Insurance Benefits
Matt Tennicott
The Doings, December 11, 1998
An organization of retired Sears employees picketed the Oak
Brook center store Wednesday, demanding the reinstatement of their term life insurance
benefits.
The group hopes to "to get back what Sears has promised
us -- all our promised and earned life insurance benefits," protest organizer and
Willowbrook resident George O'Hare said.
About 80 retirees gathered at the north entrance of Sears,
many wearing T-shirts bearing the words "Sears unfair to retirees," carrying
protest signs and shouting slogans like "shame on Sears" and "we won't go
away."
Sears Chief Executive Officer Arthur Martinez made the
decision last year to end all life insurance benefits for post -- 1978 retirees. Upset
over Martinez's decision, many retirees got together after his announcement to form the
National Association of Retired Sears Employees to represent former and even some current
Sears employees nationwide
O'Hare worked 34 years for Sears and retired in 1984. He saw
things were changing when Sears began charging him for yearly life insurance.
"I started paying $300 a year, then $600, and then up to
$1300," O'Hare said. "I saw it coming."
Wednesday's protest came a year after N.A.R.S.E. first called
attention to the issue with a rally at the same Oak Brook center store. The group went on
to sponsor protests throughout the country, and has filed a class-action lawsuit against
Sears in the federal court system, O'Hare said.
Sears retirees won't back down, former Sears Vice President
Claude Ireson said.
"We are not going to go away until Martinez changes his
mind or until the courts change his mind for him," Ireson said.
Increased competitiveness in the retail market lead to a
number of tough decisions, including the life insurance change, Sears spokesman Paula
Davis said.
"We still view (the retirees) as part of our
organization, and we understand their disappointment," Davis said. "However
retirees were not the only ones affected. We also had to let current associates know that
they will not have retiree life insurance."
"The retail landscape has changed dramatically in the
last five years, so it has been critical for Sears to make changes in order to stay
competitive," Davis said. "Retiree benefits were very expensive for us,
representing a $2.7 billion liability."
Sears also maintains that the company gradually reduced
benefits to $5,000 over 10 years " to give retirees at chance to plan on their
own," and also offered company subsidized life insurance without a physical exam,
benefits that are "very generous compared to other retailers," Davis said.
The benefit change has taken its toll on many retirees
finances.
Woodbridge resident Paul and Judith Hrgham both were laid off
from the catalog plant, Paul after 30 years and Judith after five. Since they lost their
company paid benefits, they haven't been able to replace them.
“What affects us is paying for the premiums
ourselves," Paul Hrgham said. "A lot of folks, when they retired, let their own
life insurance pass because they knew the company would be behind them. Now, for many of
us, who can only get part-time jobs if any, the wages aren't enough to pay for the
premiums.
"We have three sons that we can't paid to send to
college," Judith Hrgham added. "They have to take out more and more student
loans."
However loud the protest was, though, feelings of loyalty
still ran strong, which was evident by the number of protesters walking around the store
after the protest.
"We still love Sears," Ohare said. "We just
want to bring back the pride and loyalty Sears used to have."
Must
Not Be Employed to Win
Steven Strahler
Crain's Chicago Business
December 7, 1998
The delay in publishing Sears, Roebuck and Co.
Chairman and CEO Arthur >Martinez's turnaround tale has given an opening to the
not-so-admiring National Association of Retired Sears Employees. The group, which
has protested cutbacks in benefits, is asking members for proposed chapter titles.
(Entries: Box 874, Oak Park Ill. 60303-0874. First prize: a T-shirt with an anti-Sears
slogan). Hoffman Estate based Sears has blamed time demands on Mr. Martinez postponing
"The Hard Road to the Softer Side: Lessons from the Transformation of Sears."
Critics say its premise has been negated by Sears' renewed challenges, characterized by
disappointing sales and missed profit forecasts.
Executive
Exodus Grows at Sears
Susan Chandler
Chicago Tribune, December 4, 1998
The executive exodus from Sears, Roebuck and Co.'s Hoffman Estates headquarters
is turning into a stampede. John H. Costello, the architect of Sears' award-winning
"Softer Side" advertising campaign, has decamped from the retail giant to become
president of Wayne Huizenga's auto-retailing empire, Republic Industries Inc. Costello,
Sears' senior executive vice of marketing, is the sixth executive officer of Sears to
leave in the past year. Only two weeks ago, Sears chief information officer, Joseph
Smialowski, left to join BankBoston. And in August, Sears Chief Financial Officer Gary
Crittenden signed on with Monsanto Co. The departures come as Sears is winding up its
second consecutive disappointing financial year, which will translate into slim or no
bonuses for top corporate executives such as Costello. Costello, 52, was recruited to
Sears by Chief Executive Officer Arthur Martinez in 1993 shortly after Martinez's arrival
at the then-troubled retailer. Costello's experience with consumer products companies such
as Procter and Gamble Co. and Pepsi-Cola USA came in handy as he and Martinez identified
women as Sears core customers and developed an advertising theme--"Come See the
Softer Side of Sears"--to win them back. But Costello did more than that,
repositioning the Sears brand in the eyes of consumers through sponsoring concerts with
stars such as Phil Collins and Gloria Estefan, said Neil Stern, partner with
McMillan/Doolittle, a Chicago-based retail consulting firm. Costello also worked to bring
younger consumers to Sears through sponsorships and awards for college sports teams,
especially women's sports. And he made sure Sears was a founding sponsor of the Women's
National Basketball Association. "Sears has made tremendous strides as a marketer
while he was there," Stern said. "This is a big loss for Sears," said Kurt
Barnard, a retail consultant and president of Barnard's Retail Trend Report in Upper
Montclair, N.J. "Women before wouldn't even go to Sears, especially for clothes. But
he showed them it was a great place to shop." He will be replaced by Mark Cohen, who
joined Sears as a senior merchant in January after serving three years as chairman and
chief executive officer of Bradlees, the struggling discount chain. Sears' stock gain 56
cents a share Friday to $42.81.
narse Loses a "True Friend"
IT SADDENS
the narse board to report that Joe Kehoe,
one of the "founding directors" of our organization has passed away after a
brief illness. Joe, a retired Sears corporate attorney, will be deeply missed by all of
us, as we pursue our objective of the restoration of our retiree benefits.
For those of us, who did not know Joe
personally, he can be best remembered as the individual who personally challenged Mike
Levin, then Chief Counsel for Sears, at the Shareholders' meeting this past May.
On the lighter side he told Ev Buckardt in the
hospital the evening before he died, "I would tell you what I think of Arthur
Martinez but I promised St. Anthony I would not swear". Joe, God bless him, kept his
humor to the end.
Joe, keep your eye
on us and guide us in the fight!
IRS
- Good News!
The National Association of Retired Sears Employees has
received from the I.R.S. a letter granting exemption from federal income tax under section
501(c) of the Internal Revenue Code.
To N.A.R.S.E., tax exempt status will significantly lessen
certain expenses such as mailings to retirees. To narse members, it means that membership
dues are now tax deductible.
Unfortunately, donations are not deductible.
Score one for the good guys!
Sears Disappoints at Start of
Holiday Season
Susan Chandler
Chicago Tribune, December 2, 1998
In an ominous start to the Christmas selling season, Sears Roebuck and Co.
reported disappointing November sales Wednesday as women's apparel sales continued to
weaken. Sears, the nation's second-largest retailer, said sales at stores open at least a
year declined 3.6 percent in November, the fourth straight monthly decline for the
department store chain. Sears' total domestic store revenue, which includes sales at its
specialty chains, also fell, ending down 4.5 percent to $2.61 billion from $2.73 billion
last year. The Hoffman Estates-based retailer released its November numbers a day early
because Chief Executive Arthur Martinez was addressing a Lehman Brothers analyst
conference in Florida Wednesday and was referring to sales results. The decline in sales
led Martinez to lower year-over-year profit expectations for the second time since
October. The retailer now expects earnings this year to be less than 3 percent over
earnings per share of $3.27 a year ago. Wall Street had been expecting earnings to rise
slightly more than 5 percent, to $3.44 a share, according to a survey of analysts by First
Call Corp. Sears' stock fell $1.56 a share Wednesday to $43. Most of the nation's other
retailers will release their November sales results Thursday. Discounters such as Wal-Mart
Stores Inc. and Target are expected to make strong showings as are specialty chains such
as Gap Inc. and AnnTaylor Stores Corp. But the nation's department stores, traditionally
strong performers during the holiday season, are expected to post weak results across the
board. "It's clear that since the department stores and national brands haven't come
up with anything new, consumers are going to specialty stores for differentiation,"
said Thomas Tashjian, retail analyst with NationsBanc/Montgomery Securities in San
Francisco. Many department store chains are playing it safe this holiday season, keeping
inventories in check so they don't have to take big markdowns in late December. Marshall
Field's, for example, says it would be satisfied if December sales increase only a few
percentage points.
Stuff
You Need to Know
Nov 17, 1998
N.A.R.S.E. (Mel Schultz) has developed a "wanted"
poster for bulletin board distribution at food stores and any location offering bulletin
board space to the public (also mentioned in communications update). The
"wanted" poster seeks the names and addresses of Sears retirees. Our membership
roster grows like a weed thanks to efforts like this and those of the hundreds of Sears
retirees who have taken the time to research personal phone books, Christmas card lists,
and other sources to provide N.A.R.S.E. with the names and addresses of members of our
retiree family. You'll be pleased to know how badly those contacted want to be part of our
battle. Club Presidents will receive a master "wanted" poster for local copying
and distribution within a week or two.
"Let's Add Insult to Injury"
Sears will not provide N.A.R.S.E. with a list of retirees.
Apparently, Sears is only too happy to provide that list to Allstate Insurance company.
Sears retirees have recently received a solicitation to buy...surprise...term life
insurance for seniors from Allstate. Sears executive Tim Devereux the "General
Manager - Insurance" (Not his actual title) signs the solicitation. The solicitation
is pure arrogance . In the midst of the rebellion of 84,000 retirees on the subject of
life insurance, Sears launches a profit producing scheme to sell them term life insurance.
The lead-in line is stomach turning..."now you can guarantee more security for your
loved ones". We must look stupid. Wouldn't you love to be a fly on the wall in the
meetings that produced this attempt to profitably defuse the retiree life insurance
conflict? Or maybe they just forgot we were unhappy; they may be arrogant enough to do
that........let's not let them forget.
Sears Creates New Post to Boost Sales
Chicago Tribune,
Oct 27, 1998
In an effort to bolster the sagging performance of its
department store, Sears, Roebuck and Company has named James R. Clifford President and
Chief Operating Officer of Sears full-line stores.
Clifford's position is a new one for the Hoffman Estates
based retailer. His responsibilities will include finance, human resources, strategy,
store planning, construction and merchandise planning for Sears 840 full-line stores. He
will share responsibility for managing the stores with president Robert Mettler, who is in
charge of all merchandising and marketing, and President Allan Stewart, who heads Sears
seven domestic regions and Puerto Rico. All three presidents are equal in standing and
report directly to chief executive Arthur Martinez, a Sears spokesman said.
Martinez told Wall Street analysts last week that Sears was
being hurt by weak apparel sales and a migration of customers to discounters such as
Wal-Mart, target, and Kmart.
Clifford, 53, formally was President and Chief
Operating Officer of Sears, Canada.
NARSE California
VP Ron Schurter wrote to the Board of Directors after reading the Martinez comments above.
His analysis of Arthur's latest doublespeak follows:
Dear Sears Board Member ( by name),
Readers of the Oct. 27 Chicago Tribune, stockholders, and
investors share in the confusion generated by Arthur Martinez' words:
"Martinez told Wall Street analysts last week that Sears
was being hurt by weak apparel sales and a migration of customers to discounters such as
Wal-Mart,Target, and Kmart.”
What is the Martinez message? Is it that the “softer
side of Sears” campaign doesn't work? Is it that the sales lift guaranteed by almost
six years of a flood of new and poor quality credit accounts has come to an end? Is it
that Sears can not compete in price, quality, and fashion sense with discounters? Is it
that the Martinez strategy is not the equal of the strategy of the "marts"?
The more important question may be the one that asks if we
can believe anything from the mouth of a CEO whose consistent M.O. is to take personal
credit for all good results and to blame others when times are tough. After all, his
"flawed legal advice" comment explained away a half billion dollars worth of the
credit debacle. His "flawed consultant input" comment explained away the
dismantling of the once, intensely profitable automotive business and another huge
write-off. His rationale for that disaster (from the Interim Report to Shareholders) was
ludicrous:
“Creative solutions such as this will help us stay
nimble and competitive in the ever changing world of retailing.”
“After repositioning Western Auto as a parts-only
format, we explored ways to continue its growth without diverting capital from Sears core
businesses. By retaining a 40 percent equity position in the new company, Sears will
participate in the upside potential of this marger and create more value for our
shareholders.”
Don’t look for a pony under this pile of corporate
doublespeak. Arthur forgot to say that Western Auto and Sears automotive were core
businesses until he destroyed them with bad decisions such as the parts -only format for
Western Auto. He forgot to mention that Western Auto was sold at fire sale pricing to the
detriment of shareholders. How can any CEO write-off a business that important with
impunity? Be assured that the sale of Home Life at a huge loss to shareholders will be
blamed on some fault or flaw in some location other then the corner office at Hoffman
Estates.
Insiders contend that the Martinez revolving door of key
executives will soon spit out one or two more presidents; the field Financial V.P. just
left for the Gap; Chief Financial Officer Crittendon and General Counsel Levin have not
been replaced; a new President whose best credential is being a Martinez crony is named,
and the Martinez rationale for his placement is to improve sales. Do you expect anyone to
believe that a 51 year old whose entire resume is finance/operations will do much to
improve sales? Belief in the tooth fairy would come easier. Credibility was once very
important at Sears, Roebuck and Co.
As a Director, it is your privilege to require a review of
the company strategies and economic model. Merchandising is profit proof; "off the
mall" isn't working; credit and income from the back of the P&L statement
(service, etc.) represent the overwhelming share of company profits. With the exception of
these cash cows, Sears is running out of assets that can be sold. Under the leadership of
a CEO who would sell the future of the company as easily as he sold its past, they may be
next.
This letter respectfully requests your high-level review of
the strategies and decisions driving the future of Sears. As a retiree whose family is the
victim of one of those decisions, your review will , in my opinion , conclude that the
"flaw" lies in the CEO .....to the degree that you will have to reverse his
worst decisions and rewrite the final chapter in his self serving book.
Very truly yours,
The Packman Family
The True Meaning of the Word
"Sears Family"
In all of my time at Sears I don't believe I have ever come
across a better meaning of Sears Family than the story I am about to unfold for you. While
searching the E-mail club on our website I came across an unbelievable story about
"FORMER LOYALTY AND DEDICATION TO A ONCE GREAT COMPANY"
· The year 1935 Ben Packman starts as a secretary at the L A
Boyle Store · In 1938 he transferred to L A Pool stock where he met Ann Hurwitz. They
were later married and Ann was forced to quit, During the 50's Ben was transferred to
Mid-Cal and worked in San Leandro Pool Stock. He retired in 1972 having been a Hardlines
Merchandise Manager for several years. · August 6, 1963 twins Ben and Brent start to work
for Sears, Bruce in sales at the Army and Mission store in San Francisco and Brent at San
Leandro Central Service. Bruce retires in 1996 after serving as D/9-30-87 manager and
finished his career in sales in D-42 in the Santa Cruz CA Store. Brent retired in 1985
from San Leandro pool Stock. Bruce's ex-wife. Sandra, worked for Allstate for 14 years.
Sandra's sister Judy worked for Allstate in Menlo Park for several years.
IMAGINE THIS
"THEY COLLECTIVELY WORKED AT SEARS AND ALLSTATE
FOR OVER 113 YEARS"
Would this happen
today? Not no, but "HELL NO" !
Inside
Retailing
Susan Chandler
Chicago Tribune, Nov 21, 1998
Shoppers speak: Just in time for the holiday shopping season.
Consumer Reports magazine says it has the lowdown on the best places to shop.
And its ranking of retailers, based on a survey of its
readers, might surprise you.
Among department store retailers, Seattle-based Nordstrom
ranked first with high scores across the board for service, quality, and value. No
surprise there.
But farther down the list, Saks Inc.’s, Carson, Pirie
Scott, and Co. edged out Dayton Hudson's Marshall fields. Carson's racked up a higher
score for value even though fields came out ahead in the service category.
JC Penney Co. placed several notches ahead of Sears, Roebuck
and Co., again because its value ranking was better. Close behind Sears was Montgomery
Ward and Co., which is trying to get shoppers to "take another look."
Home Life Sold to Citicorp
Susan Chandler
Chicago Tribune, Nov 20, 1998
Only a few years ago, Sears, Roebuck and Co.
touted its Home Life furniture store chain as one of the retailer's hottest growth
vehicles. On Thursday, Home Life became one of Sears "non-core assets," and
another major embarrassment for Sears chief executive Arthur Martinez.
The Hoffman Estates based retailer announced it
was selling the troubled 126 store chain to Citicorp Venture Capital, the venture capital
arm of New York-based City Group Inc., for 100 million in cash plus some debt and lease
obligations. The Home Life sale which is expected to close by year end, will trim Sears
earnings, with a onetime charge of more than 390 million, or 5 cents a share, on an
after-tax basis.
Sears said it will retain a 19 percent equity
interest in the new company which will continue to be called Home Life. The units 2,000
employees around the country will keep their jobs, and Home Life's headquarters will
remain in the Chicago area. The chain also will continue to accept the Sears credit card
which will help the company's lucrative credit card business which generates about half of
Sears’ profits. “This transaction represents another step by Sears to redeploy
non-core assets and focus on growing our core businesses”, Martinez said.
It's the second time this year that Sears has
sold a money losing subsidiary that once was promoted as a major part of the company's
growth strategy. In August, Sears sold its Western Auto Supply Co., to an auto parts chain
in Roanoke, Virginia, and recorded a third quarter after-tax loss of 225 million. Dumping
Home Life also is an admission that Martinez needs to refocus his attention on Sears
department stores, which have turned in lackluster performances over the past several
months.
Expanding the furniture business once seemed
like a natural for Sears. Creating a freestanding home life stores opened up space for
higher margin apparel in Sears. And expanding its furniture offerings capitalized on a
major retail trend of the '90s. Competitors were shifting their emphasis towards home
related items. Still, Sears failed to sufficiently differentiate Home Life’s moderate
price offerings from those of competitors such as Montgomery Ward and Co. and Levitz
furniture Corp. which regularly put goods on sale, industry experts say. And in the early
days of the expansion push, much of Home Life furniture arrived at customers’ homes
in damaged condition which led to high rates of return and disappointing profit margins.
Another strategic error, Sears spread Home Life
stores thinly across the country, failing to concentrate them in important markets where
the advertising would have the most impact. The company admitted that mistake in 1997 when
it closed 28 stores and retrenched in a handful of core markets including Chicago, San
Francisco, Seattle, and Boston. Last year, Home Life stores racked up only 650 million in
sales down from 657 million in 1997, according to Furniture Today, an industry trade
publication. Back in the late 1990s, before it began moving Home Life out of Sears stores,
Sears sold one billion in furniture annually.
Citicorp Venture Capital is getting Home Life at
a bargain basement price and should be able to use the chain to distribute high-profile
furniture brands it already owns industry players say. The venture group is the parent of
Bannockburn-based Futorian Furnishings, which owns several major upholstery companies,
including Barcalounger, Stratford, and Simmons. Citicorp Venture Capital also has a stake
in Lifestyle Furnishings International of High Point, North Carolina, which controls a
stable of major brands including Henredon, Drexel, Heritage, Bench Craft, and Berkline.
At one time, the group owned a chunk of Levitz,
then that the nation's largest furniture retailer. In 1997, Levitz, based in Boca Raton
FL, filed for bankruptcy protection. "Home Life is a very attractive and
complementary investment," said M. Saleem Muqaddam, a partner with Citicorp Venture
Capital.
NARSE
on Chicago Cable TV
Chicago Access
Network TV
George Ohare arranged for and hosted a one hour panel
discussion titled "battle for benefits" on Chicago Access Network TV. The panel
was comprised of Elaine Leonard, Bill Barker, Chuck Harrison, Ev Buckardt, Cliff Hooks,
Tony Debevetz, and Tom Dowd. Mel Schultz provided the written outline used by George to
prompt the discussion of a large number of subjects in an orderly way. As you would
expect, the subjects included Sears background, benefit history, the role of management in
communicating benefit information, the arrival of King Arthur, the erosion of trust, the
impact on human beings, the formation of N.A.R.S.E., the legal battle, and other subjects.
Why do this? Cable companies are required to give local
communities free access channels for community subjects such as ours. N.A.R.S.E. will send
each retiree club president two videotapes. The first video will be the full one hour
panel discussion that clubs are asked to arrange to be shown on local FREE cable access
channels. The second video will be a shorter, edited version suitable for showing at a
retiree organization or club meeting. We hope that both are useful in enhancing the growth
and effectiveness of Sears retiree clubs and in finding new members for "Arthur given
back" efforts.
UPDATE ON CLASS ACTION LAW SUIT
(October 4, 1998)
Plaintiffs filed a motion for class certification so that they could
represent all Sears employees who have had their retiree life insurance reduced by Sears
benefit cutback. That motion is still pending while discovery and briefing concerning it
are completed. Sears filed a response to that after its attorneys took depositions of
approximately 15 named plaintiffs.
On September 11, 1998, plaintiffs filed an additional memorandum in further support
of their motion for class certification. In that memorandum, plaintiffs argued that Sears
breached its fiduciary duty (its duty of candor and fair dealing) by systematically and
uniformly communicating to Sears employees that they would receive "paid-up",
free life insurance upon retirement if they paid into the plan for ten consecutive years
prior to retirement despite the fact that Sears knew it could terminate or change that
benefit at any time. In support of this claim, plaintiffs submitted the affidavits of a
dozen former high level Sears executives, including two former national vice presidents of
human resources, a former president of sears retail operations in the United States and a
former national manager of benefits. Some of these individuals, like Charlie Bacon, Con
Massie, Joseph Reddington, Larry Cudmore and Tom Dowd are no doubt familiar to you.
In that memorandum, plaintiffs also argued that the Court should certify a class on
their claims for enforcement of the plan terms and for breach of contract.
Sears has until October 9, 1998 to respond to plaintiffs' arguments. The Court will
then review the parties submissions and issue a ruling on plaintiffs' motion for class
certification. Unfortunately, there is no way of knowing how long it will take Judge Moran
to rule of the issue of class certification, but when the Court issues its ruling we will
report on it here. In the meantime, discovery in the case is on-going.
Unsung
Heroes
Thomas Dowd
September 11, 1998
General Schwartskopf said it best when he said "the
heroes are the people who go into battle. They are the ones with courage. They are the
true champions." Among the 84,000 Sears retiree's who were so badly wronged by Arthur
Martinez, there are people who express their concern, their love for each other, and their
determination to recover what is theirs by their actions. The following are but two
examples of committed and dedicated groups of people who let their actions speak for them:
Fresno California retirees are coordinated by Lanella Hare.
Most protesters are former service associates. On a regular basis through May, they
protested against Sears actions in front of their Sears unit until the California summer
got intolerably hot. They are now planning strategies for the fall, and their track record
says clearly that they will do so much more.
Nat Corallo of San Jose reports that, on a consistent basis,
each of the Sears Orchard Supply stores have been visited by retiree protesters led by
Kathy Davis of Santa Clara and Paul Gandenberger. All 10 Sears San Francisco Bay area
stores have been visited by protesters at least once. In support of CEO Martinez’
visit to Torrance, The Cupertino store had retiree protesters in front of it. All they
want is their promised retiree life insurance back, and, with people like this, we can say
with confidence we will recover what is rightfully ours.
They make us proud, and we thank them because they are indeed
heroes.
Sears Sees $250 Mil Loss in Sale of Western Auto
Investors Business
Daily
August 19, 1998
Advance Auto Parts is buying Sears Roebuck's Western Auto
Unit for $175 million cash. Sears will also get 20% stake in the new company. The loss
will be recorded during the third quarter. The deal will create automotive parts supplier
with 1,500 stores in 36 states and 2.1 billion in sales, Advance Auto said. Roanoke, VA
based Advance has 915 car parts stores in 17 states.
A Warm California Welcome for the King
Tom Dowd, Torrance
Sears Store,
August 13, 1998
Under the leadership of Ron Schurter, 35 plus retirees in
their "fashionable yellow T-shirts" proudly expressed their disappointment in
Sears and King Arthur. The retirees were at all doors around the store, and they followed
Arthur Martinez as he walked the press and others around the inside of the Torrance store.
They moved from door to door following Arthur and the entourage Sears was exposing to new
retail initiatives. The L.A. retirees added their considerable chanting abilities
("WE ARE HERE TO STAY",etc.) to bring diversity to the in-store happenings.
There were six "guys in suits" monitoring but not interfering with retiree
activities...without doubt, Sears security types. Demonstrators carried professionally
printed signs that said Sears is unfair to retirees.
When the store opened, the retirees walked through the store
and took the elevator to Preston Clark's office. Preston is the store general manager of
the Torrance store. They introduced themselves to the person outside the store managers
office as friends of Preston there to congratulate him on the appearance of his store. In
the presence of an L.A. Times reporter, Preston came out, greeted them, and said that Mr.
Martinez would talk to them. Arthur did come out, shook hands, and answered several
questions on loyalty, the case of a current associate on unpaid leave after angioplasty,
and the cost of replacement life insurance (Allstate quoted to Ron Schurter a rate that
was 1/3rd of the Metropolitan rate).
Arthur gave his usual rationale and resolve for the retiree
insurance decision and, to briefly summarize his responses, said the world is different
(loyalty question); will have that looked into (employee case); we checked competition (on
insurance cost question). He assured the retirees that there are no plans to further
reduce benefits and, as he said at the annual meeting made the insurance decision rather
than a more damaging decision on health insurance. Now, don’t you feel better?
Our L.A. retirees planned, traveled distances, demonstrated
in 100 degree heat, told our story to the press and public, and confronted the source of
our discontent... Arthur Martinez. Those retirees are thanked, commended, and saluted for
representing our cause so well. They made a difference.
Virginia
Beach Club
Thomas Dowd
September 11, 1998
Club President Pat Gambardell and Jim Fletcher
hosted the recent meeting of 90 retiree members of theTidewater Club in Virginia Beach.
Tom Dowd was the guest speaker and offered the message that only frequent and widespread
retiree actions will convince King Arthur and the Board of Directors that their cruel
decision has to be reversed. The message was well received by people who have already
shown that they can make a difference. Arthur will not get any rest from the Sears
retirees in the Tidewater area! 
Advance Buys Sears' Western Auto
George Gunset,
Chicago Tribune,
August 18, 1998
Sears, Roebuck and Co. said it
has sold its Western Auto subsidiary to Advance Auto Parts of Roanoke, Va. for $175
million and a 40 percent stake in the new company. The acquisition is expected to close by
year end subject to regulatory approval. The Hoffman Estates-based retailer paid $250
million for Kansas City, Mo-based Western Auto in 1988.
Sears CEO Loses Key Player
Susan Chandler and
Sallie L. Gaines, Chicago Tribune,
August 13, 1998
The chief financial officer of Sears, Roebuck and Co. has
been wooed away by Monsanto Co., leaving another hole in the management team crafted
Chief Executive Arthur Martinez.
Gary L. Crittenden will become the fourth high-ranking
Sears executive to depart in the past nine months. Crittenden was "a
valued member" of Sears' executive committee, a group of top officers
that advises Martinez, said Sears spokeswoman Paula Davis.
With his experience in strategic consulting, operating
business units and number crunching, Crittenden was considered by many to be
in the running to succeed Martinez when he retires.
Crittenden will become chief financial officer of St.
Louis-based Monsanto, a giant in the pharmaceuticals and agribusiness fields,
effective Sept. 1.
The timing of his move may seem puzzling because
Monsanto hopes to complete its merger with American Home Products Corp. by the
end of the year. American Home's chief financial officer, Robert G. Blount,
already has been named chief financial officer of the as-yet-unnamed combined
company.
But several people knowledgeable about the merger plans
said Crittenden's appointment actually meshes neatly with longer-term
succession planning, suggesting that he will succeed Blount in short order.
At Sears, however, Crittenden's departure is further
evidence of what some are calling a revolving door at the retailer's Hoffman
Estates headquarters.
Crittenden has only been Sears chief financial officer
since December, when his predecessor, Alan Lacy, was moved over to head the
retailer's troubled credit card unit. Crittenden previously had been president
of Sears' fast-growing hardware store division and, before that, executive
vice president of strategic business planning.
Sears said Thursday that Lacy again will assume chief
financial officer duties, in addition to his credit card job, until someone is
hired to permanently replace Crittenden. "He (Lacy) knows the job well,"
Davis said.
In May, Michael D. Levin, head of Sears' legal
department, resigned unexpectedly to return to private practice after only two
years at the retailer. Sears said Levin's departure was not related to an
expensive scandal that erupted in 1997 when Sears revealed it had been
illegally collecting debts from bankrupt Sears card holders for more than a
decade.
In March, Anthony Rucci resigned as Sears' head of
administration to take the top human resources job at mutual fund leader
Fidelity Investments. Sears said the move had nothing to do with an unpopular
decision under Rucci's regime to retroactively reduce life insurance benefits
for 80,000 Sears retirees.
And last December, Steven D. Goldstein, president of
Sears' credit division, resigned to start his own business. At the time,
Martinez vigorously denied Goldstein's departure was connected with rising
losses from bad credit card debt.
"A revolving door at the executive level does not
augur well for the long-term continuity of any business," said Everett
Buckardt, the former head of the Sears Catalog and a critic of Martinez's
management style.
At first glance, American Home Products is considered
the dominant partner in the merger with Monsanto, announced in June. The
combined company will be based in Madison, N.J., the drug and
consumer-products company's home. The chairman and chief executives of the two
companies--Monsanto's Robert B. Shapiro and American Home's John R.
Stafford--will share the top job.
Other executive jobs and board seats also have been
doled out, including the chief financial officer position to Blount.
But Blount and Stafford are in their early 60s, and the
latter underwent surgery last year for prostate surgery; both are expected to
retire after a transition of a year or two, noted several people familiar with the
deal. That would leave Shapiro, who just turned 60, alone in the top job for
several years.
Insiders say the hiring of Crittenden, 45, is part of
Shapiro's plans to craft his own management team--and succession.
"He has told Crittenden that `You will become the
CFO in the merged companies at the right time. If that doesn't happen, you
will be an operating guy, but you will clearly have the opportunity to succeed me
as CEO,' " said one source familiar with the deal.
An analyst who researches both companies said
Crittenden's hiring shouldn't be read as an intent by Shapiro to grab power
immediately.
"It would be almost irresponsible of John Stafford
and Bob Blount to just walk away immediately from the American Home
perspective. They have a fiduciary responsibility to their shareholders,"
said one analyst, who asked not to be named. "Nothing surprises me
anymore, but my instinct is that they wouldn't leave immediately--maybe in a
year, two years."
Crittenden likely jumped at the Monsanto job because
"it's going to be a huge opportunity," the analyst said. Another
analyst noted that it shows foresight for Shapiro to have a younger candidate
being trained for the job.
On the other hand, several analysts and insiders said
that Shapiro is almost certain to want to consolidate his power once he is
alone at the top. There has been speculation that, once he is in control, Shapiro
will move the headquarters out of New Jersey.
While Monsanto is based in St. Louis, its Searle
subsidiary is in Skokie and its Dekalb Genetics unit is in De Kalb. In
addition, Shapiro works primarily out of offices in the Merchandise Mart. He
lives on Chicago's North Side and commutes periodically to St. Louis--a much
shorter trip than to Madison, N.J.
Crittenden, who could not be reached for comment, also
will work from the Chicago office, Monsanto said.
In the short term, Crittenden will act as chef
financial officer of Monsanto, succeeding Robert B. Hoffman, who had declared
his intention to retire before the merger was announced. Monsanto spokeswoman
Lori J. Fisher said the company decided to fill the job, despite the impending
merger, because "we need to focus on a couple of things driving some
short-term business results for Monsanto shareholders."
She said Crittenden also will have a role "in
helping plan and design the new company."
ETC . . . Ex-Sears Exec to Head UIC Business School
Cranes Chicago
business
Aug. 10, 1998
Anthony J. Rucci , 47, has been named dean of the College of
Business Administration at the University of Illinois at Chicago. He takes over the post
after serving for just three months as vice president of human resources for Fidelity
investments in Boston. Previously, Mr. Rucci who will be paid $230,000 a year, held
positions at Sears Roebuck and company. And Baxter international Inc....
The Revolving Door Goes Around . . . And Around
Boston Globe
Friday, July 24, 1998
Fidelity executive quits after three months on the job:
Fidelity investments Anthony Rucci, head of human resources,
has resigned three months after joining the mutual fund company from Sears Roebuck and
company. Rucci, 47, is leaving Boston-based Fidelity for “personal reasons”, the
company said end will rejoin his family in the Chicago area. Thomas E. Lewis who headed
the human resources department before Rucci was hired, will resume the role on an interim
basis until a successor is named. Rucci reported to James Curvey, Fidelity's chief
operating officer, and was part of the operating committee which oversees the day-to-day
running of America's biggest mutual fund company. As head of the human resources
department, Rucci was in charge of hiring, compensation, benefit plans, training programs,
and employee relations issues. The company has more than 25,000 employees. (Bloomberg)
Cries and Whispers
Marc Spiegler
Chicago Magazine
Aug. 1998, p. 15
“Looks as if “the Hard Road to the Softer
Side”, Sears chairman Arthur Martinez’ book on reviving the huge retailer, won't
be hitting the stores this fall as originally promised. Why the delay? Martinez lawyers
are said to be wary of letting it out before the Justice Department concluded its
investigation into Sears illegal debt collection from bankrupt clients”.
The three retirees who provided this magazine piece put
tongue firmly in cheek and asked the following questions:
Is Arthur on an ego trip? Do you think he will share the book
profits with the older Sears retirees from whom he took money? Didn't Chainsaw Al write a
book just before the Board of Directors released him for poor performance? Wasn't it King
Arthur who called prior management arrogant? If you're spending your time writing a book,
is there any wonder that you have to act on “flawed advice”.
Chicago
Settlement Hearing
On August 10th, Judge Lindberg (7th Circuit Court Chicago)
will conduct a hearing on the proposed settlement of the class action suit regarding the
Sears credit reaffirmation procedures. This is another segment of the consent decree
agreed to by the Company in which the N.Y. Supreme Court approved a settlement in the
hundreds of millions. The Company has agreed to a settlement that will award an additional
11plus million on attorneys and shareholders. An insurance carrier will pay the bulk of
the settlement. We will be represented at the hearing.
Sears Retirees Take Issue to Web
Susan Chandler
Chicago Tribune Staff Writer
Published: Saturday, July 11, 1998
Section: BUSINESS ; Page: 2
Retirees of Sears, Roebuck and Co. haven't had much to cheer
about recently in their fight to have life insurance benefits restored. While their
lawsuit in Chicago against the Hoffman Estates-based retailer awaits a judge's ruling on
class-action status, several court actions, including one in a landmark case brought by
General Motors Corp. retirees, have gone in favor of a corporation's right to
retroactively reduce retiree benefits.
But instead of feeling sorry for themselves, Sears retirees
are taking their complaints to cyberspace. A group known as the National Association of
Retired Sears Employees has launched a Web site to keep its more than 10,000 members
informed and to solicit new supporters.
The site, which started carrying content July 4, sets an edgy
tone with an editorial cartoon that was purchased from Crain's Chicago Business.
The cartoon by Roger Schillerstrom depicts a Sears wrench as
a product with a "lifetime warranty," a Sears dryer as one with a "limited
warranty," and a company retiree as a Sears item with "no warranty."
A letter from association Chairman Claude Ireson is no less
blunt. It calls on members to play "tit for tat," by sending Sears CEO Arthur
Martinez receipts for Sears-type merchandise purchased at other stores.
Buzz Williams, a California retiree who got the Web site up
and running with a lot of help from his brother-in-law, believes the electronic presence
will help rally more of Sears 133,000 retirees to the cause.
He is particularly proud that the site already has had six
hits from Sears headquarters in Hoffman Estates. "I hope they'll visit it. We want
them to know that we do not plan to roll over and play dead."
That's a message Sears no doubt has heard loud
and clear the old-fashioned way.
Sears
Put Furniture Stores Chain Up for Sale
HOMELIFE UNIT LOSING
MONEY, BUT SALES RISE
By Susan Chandler,
Chicago Tribune Staff Writer.
Published: Friday, July 3, 1998
Section: BUSINESS
Page: 1
Retreating from a major growth initiative, Sears, Roebuck and Co. has put its
HomeLife chain of furniture stores up for sale.
Sears told the Tribune Thursday that it recently has hired investment bankers
from Salomon Smith Barney to "explore options" for its 126 free-standing
furniture stores around the country.
For at least two weeks, the bankers have been circulating prospectuses on
HomeLife to prospective retail and financial buyers.
In addition to an outright sale, Sears' options with HomeLife could include
selling a stake to a financial partner who is interested in funding the chain's expansion,
said Sears spokesman Ron Culp.
Another option is partnering with a furniture manufacturer who is interested in
investing in HomeLife as a way to expand distribution. The Hoffman Estates-based retailer
also could decide to leave HomeLife alone, Culp said.
One strategy is clear: Sears doesn't want to invest any more of its capital in
the underperforming furniture business.
Analysts won't be surprised to see HomeLife go.
"The HomeLife business hasn't taken off to the extent we'd hoped,"
said Rick Nelson, retail analyst with Stephens Inc. in Winnetka. "The potential is
still enormous for somebody to pull this off."
Earlier this year, Sears chief executive Arthur Martinez told stock analysts he
would consider selling off HomeLife if the business didn't turn around. But the chain has
racked up double-digit same-store sales increases for five of the past seven months,
leading many to believe the chain was rebounding.
Still, HomeLife has never been a stellar performer for Sears since the first
freestanding store was opened in 1989. Sears sold about $1 billion in furniture annually
back then, but as furniture was moved out of the stores, sales shrank drastically.
Last year, HomeLife stores racked up only $650 million in sales, down from $657
million in 1996, according to Furniture Today, an industry trade publication. That ranks
HomeLife as the third-largest furniture retailer in the country behind No. 2 Levitz
Furniture Corp., which is in Chapter 11 bankruptcy, and No. 1 Heilig Meyers Furniture Co.
HomeLife stumbled because its stores were too small and its offerings too
concentrated at the moderate-priced end of the market where competition from Montgomery
Ward & Co. and Levitz was fierce, industry players say.
The chain also suffered because HomeLife stores were scattered among many
cities, making it hard to spread advertising dollars over a base of stores. Last year,
Sears acknowledged that mistake, closing 28 HomeLife stores and retrenching to seven core
markets, including Chicago, San Francisco, Seattle and Boston.
Sears is unlikely to reap a windfall even if a buyer for HomeLife emerges,
because the chain is losing money, industry experts say.
An outright sale poses other complications, because 25 HomeLife stores still are
located inside full-line Sears stores. Another downside of selling HomeLife would be the
loss of credit-card revenue generated by big-ticket furniture purchases.
Lateral
Move May Be a Step Down
Susan Chandler
Chicago Tribune Staff Writer
Published: Saturday, June 27, 1998
Section: BUSINESS Page: 2
Jane J. Thompson, the highest-ranking woman at Sears, Roebuck
and Co., is making a career move that has many Sears watchers puzzled.
This week, Sears announced Thompson was moving from president
of its fast-growing Sears Home Services unit to head a new business group, Sears Direct.
In her new capacity, Thompson will be in charge of all of
Sears' 17 catalogs and the retailer's electronic commerce activities, including its
successful Web site for Craftsman tools. She will continue to report directly to Sears
Chief Executive Arthur Martinez.
Although Sears declines to break out revenue numbers, there's
no question that Sears Direct is a much smaller business unit than Thompson was heading.
Fourteen of the 17 specialty catalogs mailed under the Sears banner are actually produced
by other catalog companies. And a company spokeswoman said there are no plans to bring
back Sears' famous Big Book, which Martinez closed down in 1993.
Thompson was selected for this new job because of her
entrepreneurial abilities and strategic thinking, honed by a 10-year stint as a McKinsey
& Co. consultant, Sears said.
Those were the same abilities that landed Thompson the prize
position of heading Sears' Home Services unit two years ago. Her marching orders from
Martinez were to triple the size of Sears' appliance repair and home improvement business
to $10 billion in four years.
Thompson has made progress, but why is Sears pulling the plug
on her two years early?
Sources close to Sears speculate the move is related to her
previous stint as head of Sears' credit unit from 1993 to 1996. Her directive there was to
ramp up Sears' sleepy credit card business. She did that, but many of the more than 11
million new accounts she added began to go sour in late 1996 and '97, torpedoing Sears'
profit last year.
Thompson's role in Sears' credit card scandal was questioned
by shareholders at the company's annual meeting in May, as was the role of Michael D.
Levin, Sears legal counsel.
Martinez defended them both. Levin resigned unexpectedly to
return to private practice a month ago, however.
That makes Thompson's lateral move sound like another shoe
dropping.
Stay away: Marshall Field's to Mayor Daley: Bringing Macy's
to Block 37 would be a really bad idea.
That's essentially the message Field's parent, Dayton Hudson
Corp., has communicated to the city's Department of Planning and Development, said Linda
Ahlers, president of Dayton Hudson's Department Store Division, which includes Marshall
Field's.
She's referring to reports that Macy's, part of Federated
Department Stores Inc. in Cincinnati, is asking the city for public money to put a store
right across State Street from Field's.
"Macy's doesn't add to what's already there. We have two
department stores on State Street," Ahlers said this week during a walk through
Field's newly renovated store in Lake Forest. "It would be ineffective to use public
funds to bring in another."
Instead, the city should carry through with Daley's vision of
creating a block of specialty retailers, restaurants and entertainment outlets, Ahlers
said.
Her view should carry some weight in City Hall. Marshall
Field's kept State Street alive during its darkest days by spending $125 million
renovating its State Street store.
Ralph redux: Polo Retail Corp. has found a successor for
Maureen Basse, the well-liked general manager of Chicago's successful Polo Ralph Lauren
store.
Patrick Sweeney is leaving his post as vice president of
international stores at Calvin Klein Inc. to assume responsibility for merchandising and
operations at the Polo store in Chicago.
Before his stint with the master of minimalism, Sweeney
worked as general manager of Polo's Madison Avenue store from 1992 to 1996.
