Sears, Roebuck & Co. today announced it is selling Sears Tower, its corporate headquarters and the world's tallest building, as part of an effort to streamline the company.
Sears' restructuring plan also will include a stock buyback, "intense cost-cutting" programs and the sale of its commercial real estate subsidiary, Los Angeles-based Coldwell Banker Commercial Group.
Another element will be an "everyday low pricing" strategy instead of frequent sales, the nation's largest retailer said.
The Sears Tower, which rises 110 stories--1,450 feet--from the grid of the downtown Loop business district, was built in 1974.
Sears did not indicate how much it hoped to get for the landmark building.
Will Remain as HQ
The company said the tower will continue to serve as corporate headquarters for the company, although the Sears Merchandise Group will be moved to smaller, less costly facilities over the next several years.
Sears said it anticipates $425 million in expenses related to the sale of the building and other changes announced today and will deduct that amount from fourth-quarter earnings.
However, the company said it expects to add $340 million in net income for the year as a result of other accounting changes.
The stock buyback program will be aimed at acquiring up to 40 million shares of Sears common stock, or about 10% of the company's 380 million outstanding shares.
The restructuring plan also calls for redirection of Sears' Allstate Business Insurance division and strengthening of its financial services subsidiary, Dean Witter Reynolds Inc., with a greater commitment to consumer-driven activities.
"We are acutely aware of investors' desires for improved returns and enhanced share value," Edward Brennan, chairman and chief executive officer, said in a statement. "And over the past year, we have thoroughly evaluated all strategic and financial alternatives available to the company.
"These alternatives have been reviewed not only with regard to shorter-term valuation objectives, but also giving consideration to the longer-term needs of our customers and 526,000 employees, the financial strength of our company and fulfillment of Sears' long-term strategic potential," Brennan said.
The corporate moves to cut costs and redeploy assets "will enable Sears to compete more effectively and profitably in its merchandising, insurance, financial services and real estate businesses," Brennan said.