In early 1993 - shortly after Arthur C. Martinez tore through Sears, Roebuck and Co., slashing jobs, closing stores and tossing out its world-famous catalog - he addressed the retailer's top 250 people and told them they'd better listen up and memorize what he was going to tell them.
Martinez, then the new chairman and chief executive of Sears' Merchandise Group, revealed what he called his "five strategic priorities" to transform the struggling, stodgy retailer into a successful one.
"I told them they'd better memorize them," he recalled recently, "because they weren't going to change."
They haven't. Small wonder. They work.
By relentlessly driving home his business philosophy - tantamount to Retailing 101 - Martinez revived a moribund Sears. Last year's revenue of $35 billion is projected to reach $38 billion this year. The company had its greatest profit ever last year, at $1.8 billion, and a stellar increase in second-quarter earnings caps 14 consecutive quarters of gains.
Thanks to a captivating advertising campaign, Sears took on a fresh, smart and sassy image, attracting female customers with its "softer side" and brand new shoppers who liked its "many sides." ga ditc
Sears stock, valued at $16.83 a share in January 1993, closed Wednesday on the New York Stock Exchange at $43.37 1/2 a share - up more than 150 percent in 3 1/2 years.
Now Martinez faces a new challenge: What does he do for an encore?
Retail analysts have plenty of nuts-and-bolts suggestions, from offering more private-label clothing to squeezing suppliers to cutting costs. But Martinez's answer is simple: He intends to stay the course.
"Being consistent in those strategies," he claims, "has been very important in what we've achieved."
This summer, as Sears begins its second year as a stand-alone retailer and as Martinez heads into his second year as chairman and chief executive, there will be no new success formula put into action, no brimstone and fireworks akin to the cut-and-slash program of early 1993, wh en Martinez was fresh from the vice chairman's job at elite Saks Fifth Avenue in New York.
Instead, Sears will be propelled forward by Martinez's five priorities:
1. To focus on the core businesses - apparel, home, automotive.
2. To make the stores "more compelling" and interesting places to shop.
3. To become more locally focused.
4. To reduce costs.
5. To instill a new mindset companywide that "today, change is a constant."
Under these guiding principles, Martinez also plans to see his separate, five-year makeover plan for Sears to fruition, concentrating on a $4 billion renovation/building program, plus the rollout of 900 free-standing hardware and home-furnishing stores by 2000.
Martinez's consistent, back-to-the-basics strategy wins praise from retail analysts.
"A very smart move," said Robert Blattberg, executive director of the Center for Retail Management at Northwestern University's J.L. Kellogg Graduate School of Management. "Successful retailing is 20 percent strategy and 80 percent execution," he said. "Most companies don't do that. Staying focused on execution is critical."
So is focusing on "core business," which has become a synonym for Sears ever since Martinez's predecessor as chairman, Edward Brennan, began the t ask of divesting the Sears empire of subsidiaries.
It was last year's spinoff of Allstate that began a new era for Sears, a return to its retailing roots. Gone are …