Sears to Cut 50,000 Jobs, Kill Historic Catalogue : Retailing: The firm, once largest department-store chain, will close 113 stores, including 3 in California.

Sears, Roebuck & Co., once the nation’s largest retailer but now limping in third place, announced Monday that it will eliminate 50,000 jobs, close 113 retail stores--including three in California--and kill its historic catalogue.

The Chicago-based retailer, which last September unveiled plans to jettison most of its financial services and real estate subsidiaries so that it could concentrate on its retail and insurance businesses, hopes to cut costs sharply and focus on its most profitable operations.

Sears also plans to close several regional personnel, accounting and credit offices, including one in Los Angeles, and trim some auto-repair services. The three California retail stores--in Barstow, Lompoc and Oakland--employ 230 people.

This latest overhaul was hailed as a good financial move on Wall Street, where Sears’ stock price jumped $1.875 to close at $50.75 on the New York Stock Exchange.

But retail watchers were left wondering how Sears plans to lure back the many customers it lost during the 1980s to discounters and specialists from Wal-Mart to Toys R Us. Old-line department stores like Sears--which peddle everything from clothing and jewelry to hardware and major appliances--have been criticized as being out of step with modern retailing, losing market share to their more agile competitors.

Sears, in particular, has been accused of losing touch with the blue-collar shopper that made the chain boom. Critics say the company neglected customer service while chasing Chairman Edward A. Brennan’s vision of a diversified retail empire carrying everything “from socks to stocks.” Along the way, Sears lost its grip on the top retail spot, slipping in 1991 to third behind Wal-Mart and K mart.

“The sleeping giant is beginning to wake up and give its competitors a run for their money,” said Kurt Barnard, president of Retail Marketing Report, a New York-based retail newsletter.

“This is an exercise in focus,” Arthur C. Martinez, chairman and chief executive of Sears Merchandise Group, said Monday in an interview. “We focused down on what’s working and what’s not working and we got rid of what’s not working.”

“We are and we will remain a mid-market retailer,” said Martinez, who was hired away from Saks Fifth Avenue last August to head Sears’ retail operation. “There is nobody else who offers a true department store in the mall setting.”

At a meeting Saturday, the Sears board approved the plan to eliminate about 16,000 full-time jobs and 34,000 part-time positions out of 350,000 retail group employees. The company hopes to improve net income by $300 million annually when the restructuring is completed in early 1994.

A total of 113 of Sears’ more than 850 U.S. stores will be closed, most of them small- or medium-sized operations.

To reach its job-elimination goals, Sears also plans to contract out the marketing of some home-improvement services, offer early retirement to 4,000 employees, and divest a small chain of women’s specialty apparel stores called Pinstripes Petites.

But a major part of the cutback will be the discontinuation of Sears’ traditional catalogue business, which started shortly after railroad agent Richard W. Sears began selling watches and jewelry in North Redwood, Minn., in 1886.

Sears produced its first general merchandise catalogue in 1896. The company said the spring, 1993, catalogue will be its last, and orders from it will be accepted until the end of the year.

Martinez said the catalogue, which had U.S. revenues of about $3.3 billion in 1992, suffered after-tax losses ranging of up to $175 million in each of the last three years.

“All businesses go through a life cycle and there is a time to start businesses as well as a time to end businesses,” said Carl Steidtmann, chief economist with Management Horizons, a Columbus, Ohio-based retail consulting firm.

The catalogue “died a long time ago but it had its burial delayed,” newsletter publisher Barnard said.

Retail analysts say it took an outsider like Martinez, who was Saks’ vice chairman, to overhaul the retail operation and bring an end to the historic “Big Book” catalogue.

“I don’t think Brennan could have brought himself to do it,” said Janet Mangano, an analyst who follows retail stocks for Burnham Securities in New York. “Martinez comes in and wields the ax.”

While the cost-cutting plan will be good for the Sears financial problems, “it still doesn’t solve the problem of regaining the customers who have been lost over the years,” Mangano said. “It’s going to be a big challenge.”

“All companies come at some point to face the issue of who they want to be their core customers. You can’t be all things to all people,” consultant Steidtmann said.

Other big old-line retailers, including Montgomery Ward, K mart and J.C. Penney, have successfully redefined the customer they are seeking, he said, adding that Sears appears to be focusing on a middle-class to upper-middle-class suburban shopper who is buying apparel for herself and her family. Martinez, however, said the company intends to remain a mass marketer.

Analyst Edward F. Johnson of Johnson Redbook Service said that Sears sales have risen since Martinez arrived at the chain.

“I think Martinez certainly is doing a great job, not letting any grass grow under his feet,” said Johnson.

Employees at the stores earmarked for closure were given no hint of their fate until Monday morning.

The Oakland store, which has been a fixture downtown since 1930, closed on Monday. It employed 160 people. The 63-employee Barstow and seven-employee Lompoc stores will be shuttered later this year.

The announcement shocked Barstow store manager Leah Harris.

“We are a very tight-knit group and the store is small enough to be like a family,” Harris said. “We spend two-thirds of our time here so (the announcement) has had a definite effect.”

“We just hope to be able to continue giving our customers good service through all this.”

Harris, 55, has been the store manager in Barstow since 1989 and has 25 years with the company. She doesn’t know if she’ll be one of those laid off.

“Nothing is sacred and no one is irreplaceable,” she said.

The Barstow store had to contend with competition from a nearby Wal-Mart and K mart that opened last November.

“When these two stores opened, it had a major effect on all the stores in this town,” said Charles Nemmer, assistant manager at the Barstow K mart. “But I have the distinct feeling that (Sears) knew they were going to close that store a long time ago.”

Martinez said he will continue to look for ways to cut costs. The company intends to “realign” its salary structure, placing a greater emphasis on linking pay and incentives to individual performance.

Sears said the restructuring will require a $1.7-billion after-tax charge against fourth-quarter 1992 results. In addition, Sears said it will take a $1.9-billion non-cash after-tax charge in the same period to adopt previously announced new accounting standards on certain benefits.

Times staff writer Alexei Barrionuevo contributed to this story.