SEARS’ MARTINEZ SEES EARNINGS JUMP IN ’97
NEW YORK — Sears, Roebuck & Co. is predicting another strong year ahead.
In a meeting with analysts in Chicago Wednesday, chief executive Arthur Martinez predicted Sears’ earnings growth on a percentage basis will be in “the mid-teens” in 1997.
That would be consistent with recent results. Last quarter, income from domestic operations moved up 14.8 percent to $531 million from $463 million. Domestic revenues increased 11.6 percent to $10.92 billion from $9.79 billion, driven by an 11 percent rise in domestic merchandise revenues and a 17.2 percent gain in credit revenues.
Martinez also tried to dispel rumors that Sears was actively hunting for acquisitions, but said they would be considered as strategically warranted.
Sears will continue to focus on sprucing up its department stores, opening new stores in smaller and urban markets and supporting specialty stores. While full-line department stores still account for the majority of revenues, new specialty-line stores emphasizing home furnishings, automotive and hardware, are accounting for a greater percentage of revenue growth, said Alan Lacy, chief financial officer.
Sears’ credit card business saw revenue growth of 18 percent in 1996. For 1997, officials expect more growth based on the fact that receivables were strong in 1996. However, write-offs have remained somewhat fixed and could rise if personal bankruptcies increase.
The retailer also hopes to attract new customers through credit account development, Martinez said.
Another initiative to build business is the planned launch of two private labels: Mosaics, aimed at black and other minority women, and CRB Khakis, a men’s casualwear collection.
Mosaics will feature more upscale and casual styles than Sears’ African Village line, which also is aimed at minority women. It will be distributed in stores where more than 30 percent of the local population is black, including sites in Chicago, Detroit, Philadelphia, Atlanta and Brooklyn.
CRB Khakis are slated to be sold in 150 to 200 of Sears 820 full-line stores nationwide.
In disclosing the plans, Martinez acknowledged Penney’s stable of strong private labels, which include St. John’s Bay, a women’s line; Arizona denim wear, and Zonz, a new line aimed at teens.