Sears Savings Will Sell 50 Branches to Citicorp Unit

Citicorp Savings, in its first major move into Southern California, has agreed to acquire 50 branch offices and about $2 billion in deposits from Sears Savings Bank, the two companies announced Tuesday.

If approved by banking regulatory authorities, the deal will give Citicorp Savings 34 branch offices extending from Ventura County south to San Diego County, with 27 of them in Los Angeles County. The other 16 are in the San Francisco Bay Area.

Sears Savings, meanwhile, would be left with 41 branches in California, including its flagship branch at the company headquarters in Glendale. The other 40 branches are located in Sears, Roebuck stores throughout the state.

Although terms of the sale were not disclosed, the deal is believed to be worth more than $120 million.

The sale had been expected. It was reported last month that Sears Savings was negotiating to sell the 50 branches to a single buyer. At the time, Citicorp Savings was described as the leading contender.

The additional branches would provide Oakland-based Citicorp Savings with a major base of operation in the southern part of the state. Citicorp Savings is a part of Citicorp, the nation’s largest bank holding company.

Citicorp Savings was formed in 1982 after its parent company in New York acquired a failing savings and loan firm whose operations were located largely in Northern California.

Sears Savings operates as part of the Dean Witter Financial Services Group, which is a financial services arm of Chicago-based Sears, Roebuck, the nation’s largest retailer.

The sale caps Sears’ effort to all but eliminate traditional branch office operations in favor of financial-service supermarkets that operate in its retail stores.

“The decision to sell the free-standing branch offices,” Sears Savings Chairman John Detterick said, “is consistent with our strategic direction to provide consumer banking products and services through non-traditional distribution channels.”

The sale also means that Sears Savings may have to lay off some of the more than 500 employees in its headquarters operations. “There will be some impact, but we don’t know exactly what yet,” said Richard Wright, vice president for marketing.

Spokesmen for both savings institutions said regulatory approval will take some months. The sale needs the blessing of both the Federal Home Loan Bank Board and the Federal Reserve Board.