Presented toHistoryCurrent OperationsCore BusinessesFigure 2OVERVIEW OF SEARS, ROEBUCK & CO.Presented toDr. Jie WangDepartment of Managerial StudiesUniversity of Illinois at ChicagoPrepared byElizabeth ArnesonManagerial Communications12:30 p.m. MWApril 24, 2000INTRODUCTIONFounded in 1886 by Richard W. Sears, Sears, Roebuck and Co. hasgrown to become the world’s second-largest retailer, after Wal-Mart. Over theyears, the company has added financial services and clothing to its originalinventory of durable goods. Sears continues to push sales of its private brandsand also offers the leading national brands. After coming close to bankruptcy in1996, Sears revamped its image in an effort to make a strong recovery. In 1999,Sears recorded revenues of $41.1 billion. The company remains focused on itsadvertising efforts to promote lower prices in hopes that Sears can continue toearn record earnings in the future.HistoryIn 1886, Richard Sears sold watches to supplement his income as astation agent at North Redwood, Minnesota. The following year, Sears teamedup with a watchmaker, Alvah C. Roebuck. Together, these young men createdthe firm Sears, Roebuck and Co. in 1893. Sears quickly prospered, because itsmail-order set-up was a cheaper alternative to the high-priced rural stores forfarmers. As the company rapidly expanded, Sears needed additional capital. In1901, the company began to sell common and preferred stock on the openmarket and has been publicly owned ever since.Soon the whole face of the country was changing; Sears’ rural customerswere no longer limited to shopping by catalog. When Robert E. Wood becamepresident of the company, Sears opened several retail stores. The first Sears2retail store was located on Chicago’s west side. With this growth, Sears beganto offer their own brand name products, such as Craftsman, Kenmore, andDieHard. Wood also recognized the average family’s need for an automobile and forlow-cost insurance. Allstate Insurance Co. was launched as a wholly ownedSears subsidiary in 1931. Allstate soon had its sales locations in Sears storesacross the nation.In 1942, Sears opened its first permanent foreign retail outlet in Havana,Cuba. Over the next few years, Sears opened stores or sales offices in Centraland South America, as well as in Europe. However, in the early 1980s, thecompany divested itself of many of its foreign retail operations. One foreignoperation that still exists is Sears Canada Inc.During the 1980s, Sears underwent major restructuring. Sears acquiredthe Dean Witter Reynolds Organization, Inc., and Coldwell Banker & Co. in 1981.Four years later, the corporation introduced the Discover Card. However, in1995, Sears decided to refocus on its core retailing business. Soon the companyshed its financial operations which included Allstate insurance, Dean Witterfinancial services, and the Discover credit card. Also in 1995, Sears, Roebuckand Co. moved its corporate headquarters from the Sears Tower to its currentlocation, Hoffman Estates. Sears continues to offer a wide range of products andservices. Recently, Sears has ventured online to offer consumers an easier,more convenient way to shop.3Current OperationsSears, Roebuck and Co.’s current CEO, Arthur Martinez, is credited withmuch of the company’s turnaround in revenues. Martinez chose to focus on “thesofter side of Sears,” which focused on a new aggressive sales and marketingapproach aimed at women. In addition to an increase in women’s apparel, Searsbegan to offer home services like repairs and installations of major householdappliances. Currently Sears operates roughly 850 U.S. mall-based stores. Also, thecompany operates more than 2,100 specialty stores including automotive (NTBNational Tire & Battery, Sears Auto Centers), and hardware (Sears Hardware,Orchard Supply Hardware). There are over 650 independently owned Searsstores that serve small towns nationwide. The company’s move from mall-basedstores to specialty stores has allowed Sears to be sandwiched between bargainretailers, like Wal-Mart, and high-end department stores, like J.C. Penney. Sears Canada is a majority-owned subsidiary and remains Canada’slargest department store chain. Sears Canada offers retail, services and creditproducts similar to those offered in Sears domestic operations. In 1999, Searsemployed 326,000 employees, an employee growth rate of 0.6 percent over thecourse of a year. Recently, Sears began offering a variety of online productsaccessible through the company’s Web site, www.sears.com. Sears is also thenation’s number one credit provider among retailers.4Core BusinessesSears, Roebuck and Co. is a leading North American retailer of apparel,home and automotive products, and services. Sears retail operations consist ofits full-line stores and its specialty stores. The full-line stores are primarilylocated in malls across the nation. These stores offer softlines and hardlines.Softlines is a complete selection of apparel and accessories for the entire family.It also includes cosmetics, jewelry, and home fashions. Hardlines is anassortment of appliances, electronics, and home improvement products andservices. The full-line stores offer leading national brands like Nike, Maytag, andSony; however, they also offer exclusive Sears brands such as Kenmore,Craftsman, DieHard, Fieldmaster, Crossroads, and TKS Basics.The Sears specialty stores are located primarily in freestanding, off-the-mall locations or high-traffic shopping centers. These stores include hardwarestores, dealer stores, contract sales, automotive stores, and home furnishingstores. The hardware stores carry Craftsman tools, a wide variety of nationalbrands and other home repair products. Dealer stores offer appliances,electronics, lawn and garden merchandise, hardware, and automobileaccessories in smaller communities. The automotive stores include Sears AutoCenters and NTB National Tire & Battery stores. They offer automobile batteriesand related automotive services. Sears also operates The Great Indoors, whichis a prototype store for home decorating and remodeling. It