Sears, Roebuck and Co. announced Thursday the latest move in a campaign to slim down and tighten up - a reorganization of its central merchandising operation that will cut some 800 management jobs.
The changes in the Sears Merchandise Group, which will close 24 regional administrative offices, are the latest in a series as the nation's largest retailer tries to hold its own in a fast-moving, highly competitive market.Since October, Chicago-based Sears has put its trademark Sears Tower, the world's tallest building, up for sale, moved to offer more brand-name products and shifted to everyday low pricing.
Thursday's announcement calls for streamlining the merchandise group, which is structured "horizontally" with an ever-widening chain of commmand.
The goal is creation of six crisp new operations, with direct reporting and accountability from the retail store to the group vice president - in appliances-electronics, home fashions, home improvement, women's apparel, men's-children's apparel and automotive, the company said.
"Each of these businesses in Sears stores will report directly to a district manager for that distinct business, who will be accountable for customer service, sales and profits in 10 stores and report to a region manager for that business," said Michael Bozic, chairman and chief executive officer of Sears Merchandise Group.
"The new structure will allow us to better execute the strategies that will make us more competitive and more profitable," Bozic said.
The merchandise group's restructuring, effective Aug. 1, will eliminate numerous field offices, including the 24 regional administrative offices that oversee Sears' 824 stores under the current system. Ten regional locations will be retained to provide support to retail store operations.
The reorganization "takes away the old structure and makes a leaner company, one that has more room for profit improvement," said analyst Walter Loeb of Morgan Stanley & Co. in New York.
"I think what is necessary for Sears to be competitive . . . given the change in pricing structure . . . is to reduce cost of the operation, and this a step in that direction," said analyst Joseph Ronning with Brown Brothers Harriman Inc. in New York.