Sears to cut 1,500 retail jobs, exit carpet business
Published Jan 9 2002
Bloomberg News
HOFFMAN ESTATES, ILL. -- Sears, Roebuck & Co. will
eliminate 1,500 jobs and quit selling and installing carpets, as
the biggest U.S. department-store chain frees up space for
more profitable products such as appliances.
The company expects to book an undisclosed amount of costs
for the moves in the fourth quarter, spokeswoman Peggy Palter
said. The company will report results Jan. 17. Sears, which
employs 275,000, might shift some affected workers to other
positions, Palter said.
Sears also has begun a four-year program to remodel about
600 of its largest stores. The company Monday said it will
reformat 50 this year to install central checkout and more
self-service areas. The company will open eight stores and
move seven others this year.
Most of the new stores will open in March, in states including
Arizona, Florida, Illinois, Maryland, Minnesota, Nevada, New
Mexico, North Carolina, Texas and Virginia.
In the Twin Cities, Sears has stores at Brookdale Center,
Burnsville Center, Eden Prairie Center, the Mall of America,
Maplewood Mall, Ridgedale Center and St. Paul. It will move
its Coon Rapids store to the Riverdale Village development in
August.
The job cuts add to 4,900 positions that CEO Alan Lacy is
eliminating to help double profit in the next three years at the
company's retail, product-installation and repair businesses.
Sears has gotten rid of other slow-selling items such as
cosmetics. It has exited installation and services businesses that
aren't directly tied to store merchandise.
"Their big opportunity for growth is cost cutting," said analyst
Matt Spitznagle of Northern Trust Corp., which owns Sears
stock. "They are trying to get rid of the non-core businesses."
Shares of Hoffman Estates, Ill.-based Sears rose 88 cents to
$50.40. They have risen 38 percent in the past year. The
company has about 860 department stores and more than
2,100 specialty stores. It sells carpet at 560 locations.
Sears is one of the nation's oldest carpet retailers, though
Home Depot Inc. last year said it was the biggest. Home Depot,
the largest home-improvement chain, also is testing a store in
Dallas that sells only floor coverings.
Floor space for the carpet business will be used for other
home-related products, Palter said. Sears also will stop selling
custom-made window blinds and drapes, though it will
continue to carry ready-made window decorations and
decorator rugs, she said.
"Installed carpeting and window treatments take up quite a bit
of floor space," Palter said. "We really think that floor space
can be put to better use or more profitable use."
Sears hired individual contractors to install carpeting at
customers' homes. Lacy, who ran Sears's services business
before becoming CEO in October 2000, wants the division to
focus on appliance repairs and other services that are linked to
products that Sears sells in its stores.
© Copyright 2002 Star Tribune. All rights reserved. |
