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Sears seeks to revive sales with new post
Amid a fourth straight year of falling sales, Sears, Roebuck and Co. has launched an outside search for a new executive to oversee all of its stores and marketing operations.
The search to fill the new position, which carries the title of president of Sears retail, coincides with the abrupt departure Monday of Mark Cosby. "He was advised that his job was being eliminated in connection with the creation of this one," said Sears spokesman Ted McDougal.
The former Kentucky Fried Chicken executive was named president of Sears' 870 mall stores in November 2002.
The search for a top retail executive comes only days after Sears disclosed that June monthly sales fell a disappointing 3.1 percent. June also marked the two-year anniversary of Sears' purchase of the Lands' End clothing line, but apparel results remain poor.
Cosby's departure from the Hoffman Estates retailer is the latest in an executive suite rampant with turnover. Among the top 15 officers at Sears in 2003, six were new to their posts.
The new president will oversee not only Sears' mall stores, as Cosby did, but also specialty stores such as hardware and the company's growing off-mall presence. The executive also will head marketing efforts and assume Cosby's duties in merchandising and supply-chain management.
Janine Bousquette will remain chief customer and marketing officer.
Furthermore, the executive will be considered second in command and a possible heir apparent to Chief Executive Officer Alan Lacy, 50. Lacy, Sears' former chief financial officer, was promoted to the top job in late 2000 but has yet to log an annual sales increase.
The ideal candidate for the new post would be an experienced merchant, "preferably someone with a successful record of running a department store or of turning around a major retailer," said Fitch Ratings analyst Philip Zahn.
Last month the bond-rating house downgraded Sears' debt, citing "weak operating performance and growing competitive pressures."
Not a reflection on execs
McDougal said the outside search does not reflect poorly on Sears' current executives. "We're looking for someone with expertise in a much more aggressive off-mall growth agenda than we've pursued in the past," he explained.
Indeed, every off-mall rival should expect to see its executives recruited by Sears, said Kurt Barnard, president of Retail Forecasting in Upper Montclair, N.J.
"Everybody from Home Depot to Wal-Mart to Target to Lowe's to Best Buy to Circuit City--so long as the people involved have thorough off-mall experience," he said.
Last month, Sears announced it would buy or lease 61 stand-alone stores from Kmart Holding Corp. and Wal-Mart Stores Inc. to protect market share from fast-growing rivals.
For Lacy's CEO job to be secure in the long term, "I'd think there'd have to be signs that things are turning around this year," Zahn said. Customer service scores are up, but revenues must at least stabilize, he said.
After dropping 2.7 percent in 2003, however, sales in stores open at least a year are down another 1.6 percent year-to-date.
CEO created new post
Creating the new post was Lacy's decision, McDougal said, and didn't emanate from pressure by Sears' board or key shareholder Edward Lampert, who owns 14 percent of the retailer's stock.
Cosby was hired in November 2002 with much fanfare.
"Mark's appointment fulfills my objective to bring all aspects of the full-line stores under the leadership of a dynamic and experienced executive with proven successes in strategy and operations at leading national, consumer-driven companies," Lacy said at the time.
But early on his hiring triggered questions about whether Sears hired the right person.
Cosby's major accomplishment at KFC included rolling out cobranded eateries featuring KFC and Taco Bell under one roof.
Supporters of Cosby's hiring argued that Sears needed a fresh perspective. They also contended that managing a restaurant chain's hourly workforce is similar to the challenge of delivering good retail service.
Cosby lasted less than two years in the job.
Sears has made a habit of hiring executives with "limited major retail store experience," a former Sears executive said Monday. "And it wonders why sales are in the tank."
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Sears blamed poor Father's Day sales and cool weather for a decline in sales in the five-week period ending on July 3, which pulled down year-to-date sales.
Percent change from previous year
June '04 (year to date) -1.6%
*Sales compared for stores that have been open at least one year
Source: Sears, Roebuck and Co.