NEW YORK — The softer side of Sears, Roebuck & Co. has been getting softer.
The Hoffman Estates, Ill.-based retailer plans to overhaul its cost structure, which includes job losses at its headquarters, as part of its quest to gain productivity improvements, according to a spokeswoman.
She explained that the review was "something introduced to our organization in the last couple of weeks." Although market sources said several hundred jobs are expected to be lost, the spokeswoman declined comment on the numbers involved.
As reported, the reduced head count is expected to be finalized within the next two months. Sears’ review follows an ongoing slump in sales and concerns over its credit card portfolio.
Despite the retailer’s lackluster performance, chief executive officer Alan Lacy took home a $1.8 million bonus last year, nearly tripling the bonus he received — $670,000 — in 2001, according to a regulatory filing last week.
Meanwhile, staffers at Hoffman Estates are bracing for job cuts.
"When the cuts take place, the vast majority will occur at headquarters. A lot of departments are undergoing review, right now," the spokeswoman said.
She declined comment on how much the retailer was hoping to save on its cost-cutting measures, as well as whether it was having any problems meeting its business plan goals for fiscal 2003.
Sears is also making adjustments to its Lands’ End operation and Covington line. Another spokeswoman, this time for Sears’ Softlines, said that in-store shop formats will be used for all Lands’ End merchandise. The rollout last fall included the format for its women’s and children’s apparel sections, but not for men’s, where Lands’ End khakis were alongside those by Dockers and Covington in some stores. The other stores in the rollout had the in-store shops for men’s as a test to gauge customer reaction.
She said that sales showed that the in-store shop format drove more volume.
By August, the company expects to have Lands’ End in all 870 full-line stores. The line is in 401 stores currently.
In addition, adjustments are being made to Covington to help differentiate it from Lands’ End."Where Lands’ End is very classic, Covington is classic with a twist," the Softlines spokeswoman commented. "I wouldn’t call it trendy, but it will be classic apparel with Lycra or fall colorations to it. It might be a little different in style or fabric. We’re trying to make a distinction between Covington and Lands’ End. This spring, for example, Covington had more florals."
The current game plan is to have the two brands almost adjacent to each other, with both very close to the mall entrance. Lands’ End is typically to the left of the entrance, while Covington is usually straight ahead in the ready-to-wear section, the spokeswoman said.
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