Sears Announces Hiring Freeze
Sears, Roebuck and Co. has issued a hiring freeze for its corporate headquarters in Hoffman Estates, Ill. in an effort to reduce costs. Sears CEO Alan Lacy sent out a memo on May 14, telling employees to minimize travel, defer training, streamline projects, eliminate off-site meetings and refrain from hiring consultants, according to the Chicago Tribune. The hiring freeze will not apply to the Sears stores.
In the memo, Lacy maintained, "This is not a layoff initiative, but a spending adjustment in response to our recent performance." Lacy also stated, "We're asking that headquarters staff carefully evaluate discretionary expenses to minimize second-quarter spending and review second-half expense plans with the goal of further reducing costs."
According to the Chicago Sun Times, Lacy has tried to turn around Sears' performance by revamping stores, buying the Lands' End apparel brand and introducing self-serve and shopping carts to better compete with Target and Wal-Mart. It also committed to opening five Sears Grand stores to compete with Lowe's and Home Depot.
Bill White, general manager for full-line stores, went so far as to tell the National Association of Retired Sears Employees last week that there is potential for opening 500 Sears Grand locations across the country, according to the Chicago Tribune. "We certainly have the cash to invest in the expansion now," said White.
Nevertheless, 500 store openings will not happen in the near term, according to Lacy. He did confirm in the Chicago Tribune that the Sears' real-estate department has identified dozens of possible locations for future Sears Grand stores However, he also said, "It's roughly an 18-month cycle from choosing a site to opening the doors. We will grow in a quality manner as fast as resources allow." Chris Brathwaite, Sears spokesman, affirmed that there are "no definite plans about a particular number of Sears Grand stores" to the Chicago Tribune, in response to White's comments last week.
Last December, Sears announced a restructuring project called Project Sharp, in an effort to make the company more efficient. The restructuring hasn't resulted in any layoffs, though Sears has not ruled them out. "We've said all along that was a possibility but never the intention of the program," said Brathwaite in the Chicago Tribune.
According to the Chicago Sun Times, Sears has struggled to survive as a retailer after it sold its $32 billion credit-card business, which accounted for 60 percent of its profit, to Citigroup on November 3, 2003. On April 21, 2004, Sears reported a net loss of $859 million, or $3.90 per share, for the three months that ended April 3, compared with a profit of $192 million, or 60 cents per share, for the same period last year. Sears expects second-quarter earnings of between 78 cents and 83 cents a share.