Sears Plans Management Changes in Retail Division

Sears, Roebuck & Co. plans a major management overhaul in its retail division but will not disclose what the restructuring will include until the changes are described to the company’s headquarters staff, a Sears spokesman said Monday.

Philo Holland, the company’s national public affairs manager, said Sears Merchandise Group officials would meet with employees in Chicago this week to discuss the restructuring, “which will take place over the next several years.”

Holland said he could neither confirm nor deny a report in Crain’s Chicago Business that the nation’s largest retailer planned to transform its 27 merchandise-buying groups into independent business units and lay off some headquarters personnel.

No Layoff Announcement

“We need to hold these meetings this week with our own people to lay out the plans,” he said. “I can’t confirm or deny (the Crain’s report) until we’re able to talk to our employees. For them to read it in the newspaper before we tell it to them would be inappropriate.”

Crain’s, a weekly newspaper, reported in Monday editions that Sears planned the overhaul because of sluggish sales and profits.

Quoting a Sears source it did not identify, Crain’s said the company planned significant work force reductions among its headquarters personnel through layoffs or attrition.

While Holland declined comment on the company’s plans, he said: “There will not be any layoffs announced this week.”

Crain’s reported that, as part of the restructuring, Sears would reorganize buying groups for every product line and scrap its past policy of using one management structure for each unit.

Repositioning Effort

The company also plans to analyze the competitiveness of each product line, from hard goods such as washing machines to soft goods such as fashion, to see if its profits are at an acceptable level in individual areas.

Although Wall Street analysts said they did not know what Sears’ executives had in mind, they said the company could be trying to reposition itself in the retail industry as well as cut costs.

“They’ve been an underperforming group for the company,” said Karen Sack, an analyst with Standard & Poor’s Corp., of the Sears Merchandise Group.

“They’ve turned in a really mediocre performance, and it’s a difficult retail market for at least 1988,” she said. “They’re going to have to do something to become more flexible and responsive to the changes in what’s going to be a very lackluster sales environment.”