Sears CEO Hopes to Boost Retail Operations

Alan Lacy, the new chief executive of Sears, Roebuck & Co., said he will focus on shoring up the company’s retail operations, which have lagged profit and sales expectations for three years. “We recognize that we don’t make enough money in our retail business,” Lacy said at a meeting with Wall Street analysts and investors. Lacy has held the top job at Sears, the No. 2 retailer behind Wal-Mart Stores Inc., for about six weeks. He replaced Arthur Martinez, who is retiring in December. Before the promotion, Lacy headed Sears’ credit and service operations. The Hoffman Estates, Ill., company’s retail operations consist of 860 full-line department stores and 2,100 specialty stores. The specialty stores include NTB auto-parts stores and Sears Hardware stores. The retail stores generate about $29 billion of Sears’ $40 billion in annual sales, but profit margins are below those of the competition. The company’s credit business has been the primary driver of earnings growth in recent quarters. The company has seen particular weakness in apparel sales, while lower-margin appliance and hardware sales have been robust. In an effort to improve profitability in apparel, Lacy said, Sears is buying from fewer vendors, sourcing more merchandise from overseas manufacturers and emphasizing its private-label clothing brands such as Fieldmaster and Canyon River. Sears shares rose 47 cents to close at $30.74 on the NYSE.