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
"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
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
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
"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
1. To focus on the core businesses - apparel, home, automotive.
2. To make the stores "more compelling" and interesting places
3. To become more locally focused.
4. To reduce costs.
5. To instill a new mindset companywide that "today, change is
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
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
It was last year's spinoff of Allstate that began a new era for
Sears, a return to its retailing roots. Gone are insurance, real
estate, financial services and, finally, on-line computer services,
with the recent sale of its stake in Prodigy. …