November 17, 2004

THE CHICAGO TRIBUNE reports on the KMART - SEARS merger. Quotable:
The new management team will try to forge a single, lower-cost competitor, while keeping Sears and Kmart as separate chains. Still, the new company likely will sell off some stores and cut redundant operations ..

The move will push Kenmore appliances, Craftsman tools and DieHard batteries into Kmart's 1,500 discount outlets. It will help Sears spruce up its 850 department stores with Kmart's wildly popular Martha Stewart line of linens, towels and paints.

While Sears Holdings will be based in Hoffman Estates, Kmart chairman Lampert takes the chairman's job. Sears CEO Lacy will become vice chairman and CEO of the new holding company .. Aylwin B. Lewis, Kmart's chief executive, will be the CEO of both the Sears and Kmart divisions of the new holding company ..

Lacy said the merger will boost both companies by "accelerating the Sears off-mall growth strategy and enhancing the brand portfolio of both companies." Sears has been adding stand-alone stores with a product mix closer to Kmart; the Sears Grand store in Gurnee was one of the first. The combined company will have 3,500 stores, but some likely will be sold. "We have to consider other alternatives" for underperforming stores, Lampert told analysts today ..

Lampert predicted the combined company will save $500 million within three years by squeezing costs out of its supply chain. "We need to have a very low cost structure in order to compete with our biggest competitors,'' he said ..

Sears' heyday was the 1960s when it ruled shopping malls, selling everything from kitchen stoves to kids' apparel and power tools to a rapidly growing middle class. The Sears credit card gave many young families their first access to revolving credit. Its Allstate insurance unit, later spun off, insured their homes and autos.

Sears stock has generated a total return of 59 percent over the last 10 years, far less than Wal-Mart's 362 percent total return. Sears' stock hit a 10-year low of about $24 a share in the fall of 2002 after new problems with its credit card portfolio arose. The stock rebounded 23 percent to about $46 earlier this month after a real estate trust bought a stake in the company.

BONUS: PHOTOS -- SEARS through the years.

And here's the official history of SEARS.

A&E's "SEARS BIOGRAPHY" can be ordered here. Posted by Greg Ransom | TrackBack