Brennan Tells Sears Holders the Rebound Will Continue
CHICAGO -- Buoyed by a year of strong sales gains in the Merchandise Group, Edward A. Brennan, chairman and chief executive officer of Sears, Roebuck & Co., promised shareholders more of the same in the year to come at the company's 87th annual...
CHICAGO -- Buoyed by a year of strong sales gains in the Merchandise Group, Edward A. Brennan, chairman and chief executive officer of Sears, Roebuck & Co., promised shareholders more of the same in the year to come at the company's 87th annual meeting Thursday.
The atmosphere at the meeting reflected the turnaround in store performance. Held at the Chicago Art Institute, the mood was upbeat; last year's meeting was a litany of stockholder complaints.
Brennan told about 350 shareholders that growth in Sears comparable-store sales last year was 9.1 percent. The momentum continued in the first quarter, with same-store sales up 13 percent, but he warned: "As competition intensifies, increases like these will become more challenging to repeat. But the fundamentals of the business are sound going forward."
At a press conference following the meeting, Arthur Martinez, chairman and ceo of the Sears Merchandise Group, said he was gearing for same-store apparel sales gains in the high single-digits for the rest of the year.
He added that same-store apparel sales are already exceeding planned increases of 4 to 5 percent and would continue to benefit from the addition of another 4 million square feet of selling space and the continuation of Sears' successful "softer side" campaign.
Asked how Sears was doing on its reported aim to build soft lines from 26 percent of its total business to 40 percent, Martinez said, "It's good news and bad news."
Last year, soft lines grew by 2 percent to 28 percent of Sears' total business. That was slower than planned, but only because sales of hard lines were so strong, he said.
On the subject of the new private-label cosmetics line being developed by Sears, Martinez said the company's prime investment was in talent -- the chain lured Pierre Rogers, former president of LancÖme, as reported. The costs of developing the line would be comparable with sourcing an apparel line, he added.
"We expect to be in positive gross margin from day one," he said.
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