The Leaner Side of Sears

Sears Roebuck & Co. (Hoffman Estates, Ill.) announced it will cut nearly 5000 positions in the next 18 months as part of its mission to “cut costs, improve its merchandise assortment and create a more balanced and efficient marketing program.”

Chairman and ceo Alan Lacy says the initiatives are expected to increase Sears'operating income by more than $1 billion and double profits in its retail and related services operations over the next couple of years.

The retailer said it will eliminate 1300 positions from its corporate headquarters by the end of 2002 and will cut 3600 field positions over the next 18 months. The cutbacks represent a reduction in Sears'total work force of roughly 20 percent.

Lacy indicated that some of the new initiatives would include more discounting, more self-service, an increased emphasis on home appliances and less “clutter” of weak-selling products on the sales floor.

This strategy [will create] an easier shopping experience for our customers while operating with greater focus, speed and efficiency,” he said. He also said Sears will adopt “more of an off-mall look.”

Retail analyst Kurt Barnard applauded the moves as remaking Sears “into a new kind of department store – like Kohl's, but with a little overlay of the traditional department store.”

In an effort to improve its merchandise assortment, Lacy says the company will put an even stronger emphasis on its apparel business. That will include improving the depth of its assortments and moving towards a single proprietary casual brand for men's, women's and children's clothing. The company said it will also offer more self-service in areas that require less assistance. Centralized checkouts will have been installed in 140 department stores by the end of the year. All Sears stores will feature the checkouts by mid-2002.

Lacy said Sears will eliminate “less productive” promotional activity and focus more on promoting the Sears brand.