Sears Savings Bank--the division of Sears, Roebuck & Co. that fell on hard times in 1986--is negotiating to sell about 50 of its 91 branch offices in California to a single buyer, industry sources have told The Times.
Citicorp Savings in Oakland is the leading candidate to acquire the branches, industry officials believe.
Sears Savings Bank operates as part of Dean Witter Financial Services Group, which in turn is part of Chicago-based Sears, Roebuck, the nation’s largest retailer. Sears Savings changed its name from Allstate Savings three years ago.
A Dean Witter spokesman declined comment on the sale reports. “It’s against Dean Witter’s policy to comment on speculation regarding our business transactions,” the spokesman said.
Citicorp Savings President Ed Valencia reiterated that his financial institution has major expansion plans for Southern California. But he added in a phone interview: “Whether we’re negotiating or interested (in the Sears Savings branches) is something we cannot comment on.”
According to one industry source, Sears Savings has sought bids from several major financial institutions. Up for sale are almost all the “stand-alone” branch offices--those not part of Sears, Roebuck stores--that have about $2 billion in deposits, the source said.
Industry observers and analysts say a branch sale involving Sears and Citicorp would make sense for both of these financial-service behemoths.
The sale would also allow Sears Savings to continue to de-emphasize traditional--and expensive--branch office locations in favor of the financial service supermarkets that Sears, Roebuck has been establishing in its retail stores. About 40 of the Sears Savings offices are located in Sears, Roebuck stores, a company fact sheet shows.
Last June, Sears Savings agreed to sell 16 branches in small and medium-sized markets to American Savings in Stockton. Its remaining offices are now located in the San Francisco, Los Angeles and San Diego areas.
Since its formation four years ago, Citicorp Savings has stated its intention to expand its branch office operations to Southern California, where most of the Sears Savings outlets are located. Citicorp Savings was formed after its New York-based parent company acquired failing Fidelity Savings.
Valencia said Citicorp Savings plans to double its 92 branch offices by the end of 1987. Eventually, the thrift wants to have as many as 400 branch offices in California, Valencia has told reporters in recent weeks.
Sears Savings has $6.43 billion in assets and $5.1 billion in deposits, making it one of California’s largest savings and loans. Its formidable size and famous name notwithstanding, the Glendale-based financial institution seems to be having more than its share of problems.
“It has never been a very good operation, primarily because they try to operate it out of Chicago,” said Ernest Leff, a savings and loan attorney in Beverly Hills. John J. Detterick, chairman and chief executive of Sears Savings, is based in Chicago.
Latest available figures at the Federal Home Loan Bank of San Francisco show the S&L; earned only $1.49 million in the first nine months of 1986, largely because of heavy losses in the operations of an unspecified subsidiary. By contrast, the S&L; earned $23.6 million in 1985, the unaudited regulatory reports show.
The Dean Witter spokesman also declined comment on Sears Savings’ financial performance. “No one discusses the financial reports of Sears Savings Bank right now,” he said without elaboration.
The internal changes at Sears Savings appear to have taken their toll in the ranks of upper management. Gerald E. Niemeyer resigned a few weeks ago as president and chief operating officer because of apparent philosophical differences with Detterick.
Detterick, in a letter to Sears Savings employees dated Dec. 9, 1986, stated:
“Jerry’s personal goals and career ambitions have not been fully realized as we have continued our redefinition of the savings bank role within the Dean Witter Financial Services Group. His resignation comes after a year of discussion with me about these issues.”
Neither Detterick nor Niemeyer could be reached for comment.