Sears to Cut 50,000 Jobs, Discontinue 'Big Book' Catalog
Jan. 25, 1993
CHICAGO (AP) _ Struggling Sears, Roebuck and Co. announced today it will eliminate about 50,000 full- and part-time jobs, close more than 100 stores and discontinue its ''big book'' catalog, a staple for nearly a century.
Sears said it is eliminating 16,000 full-time jobs and 34,000 part-time ones.
All the changes, approved by the Sears board Saturday, should be completed by early 1994, the Chicago-based company said in a statement.
The cost-cutting measures also include a revised salary structure for store employees and elimination of some auto-repair services.
''We have tried to attack all our nonperforming businesses, nonperforming locations and nonstrategic assets and to deal with them at one time,'' Arthur C. Martinez, chairman of the Sears Merchandise Group, said in a telephone interview.
''I would like to believe this is a full and complete resolution of all of our major problems,'' Martinez said. Nevertheless, he added: ''We will be continuing every day, every week and every year to find ways of lowering costs. It is an ongoing process.''
In early trading on the New York stock exchange, Sears stock was up $1.87 to $50.75 a share.
A major part of the cutback will be discontinuation of Sears' traditional catalog business. The spring 1993 catalog will be its last and orders from it will be accepted until the end of the year. Sears produced its first general merchandise catalog, which came to be known as the ''big book,'' in 1896.
''This was a very difficult decision because the catalog is our heritage. It's how Sears started,'' said Martinez, who was brought in from Saks Fifth Avenue last year to head the retail division.
He said, though, that the U.S. catalog had after-tax losses ranging from $135 million to $175 million in each of the past three years.
''We have concluded that we cannot improve our market position or achieve an acceptable return on investment fast enough or with sufficient certainty to justify remaining in the business,'' he added.
Sears still plans to circulate smaller specialty and promotional catalogs in 1993.
Sears also said it would close 113 retail stores, most small- to medium- sized. The company said it would identify all the stores later today; closing dates will vary and were not immediately announced.
Sears operates more than 850 stores in the United States, including more than 400 of the small and medium-size stores.
Sears also plans to offer early retirement incentives to about 4,000 salaried corporate and merchandise group employees over age 50 who have at least 20 years service with the company.
Sears has eliminated more than 48,000 jobs in its retailing division since 1990 in an effort to regain market share and ensure the unit's profitability. The Sears chain slid from No. 1 to No. 3 among U.S. general merchandisers, behind No. 1 Wal-Mart and No. 2 Kmart, in 1991.
In October, Sears reported an $833.7 million third-quarter loss, its first quarterly loss since 1933. The company blamed the results on enormous insurance claims for hurricane damage and a costly auto-repair scandal.
When completed, the restructuring is expected to improve net income by about $300 million annually and improve cash flow, Sears said.
The company will take a $1.7 billion after-tax charge in the fourth quarter of 1992 for the restructuring.
Sears will also take other actions that will cut full-time and part-time positions, including speeding up the consolidation of regional accounting, credit and human resources offices.
Sears also said it would try to make salaries more competitive, but did not say what that meant.