Sears May Order Historic Catalogue Operation Shut

Sears, Roebuck & Co.’s board is expected to consider the fate of the company’s troubled, 103-year-old catalogue operation at a meeting in Chicago on Feb. 11 and 12, retailing analysts said Monday.

“I think we’re at a point where the decision to close or redefine (the catalogue operation) is upon us,” said John S. Landschulz, a longtime Sears watcher with Howe Barnes Investments in Chicago.

Analysts suggested that a sale or shutdown of the catalogue business, which one industry observer said has lost “several hundred million dollars,” is one of a variety of steps that the company might consider.

Any further cost cutting at Sears would follow drastic measures already taken to attempt to boost its sagging bottom line. In October, 1988, the retailing and financial services company, which also owns the Dean Witter Reynolds brokerage and Allstate Insurance Co., announced a sweeping overhaul highlighted by plans to sell its Coldwell Banker commercial real estate unit and a shift to a policy of “everyday low prices.”

In early January, Sears, which has 314,000 employees in its domestic merchandising operation, said it plans to eliminate 21,000 non-selling positions in stores over the next six months. At the time, analysts said they expected that the company would have to do even more to get costs under control and restore vitality.

A spokesman at Sears’ Chicago headquarters would not comment directly about speculation that the catalogue operation might be sold or closed.

“We conducted a comprehensive review of our catalogue operation in 1988,” Gordon Jones said. “We have made significant improvements since then and expect improvements to continue in 1991.”

In composite trading on the New York Stock Exchange, Sears closed Monday at $28.75, up $1.

Suggestions that the firm might sell or close its money-losing catalogue operation have “popped up” frequently in recent months, Landschulz said. A report Monday in the New York Times said analysts have maintained that Sears was negotiating to sell the operation, possibly to a Japanese buyer. Sears’ Jones said the idea of a Japanese buyer was “news to me.”

Landschulz said he does not “think it’s an automatic sale” because Sears has been attempting to find ways to improve its mail-order marketing and hold down expenses to keep the famous but flagging business alive.

The company in 1988 began streamlining product offerings and selling unprofitable catalogue offices. It also began taking orders over toll-free telephone lines and selling some European-style clothes.

Nevertheless, Walter F. Loeb, a retail consultant in New York, said he estimates that catalogue sales declined in 1990 to about $3.2 billion from $3.5 billion in 1989. Sears is expected to report sharply lower 1990 earnings on Feb. 11.

If time is running out on the catalogue operation, which a Sears spokeswoman said has 1,330 full-time employees and about 17,900 part-time employees, it would be ironic, given the business’s roots as a timepiece vendor.

In 1886, Richard Sears, a railroad station agent in North Redwood, Minn., began selling watches to other agents to supplement his income. The next year, he opened a location in Chicago and hired a watchmaker named Alvah C. Roebuck. The catalogue, featuring a variety of merchandise, debuted in 1888.

CATALOGUE FACTS The first Sears catalogue, featuring watches and jewelry, appeared in 1888.

By 1895, Sears, Roebuck & Co.’s catalogue had 532 pages, offering not only watches but wagons and stoves as well.

In 1990, about 54% of American adults purchased goods by mail, according to the New York-based Direct Marketing Assn. In 1985, about 46% used mail order.

The Direct Marketing Assn. estimates that there are 8,500 to 10,000 mail order operations in the United States.