Sears, Roebuck and Co. is feeling the pinch from hardware rivals and an expected decline in credit-card income this year.
But the Hoffman Estates, IL, U.S.-based retailer expects to produce as much as 5-percent earnings growth anyway by tweaking its sales pitches, improving merchandise selection in stores, and cutting off credit for shoppers who are deemed credit risks, CEO Alan Lacy told Wall Street analysts.
While the company expects profits from its retail operations to increase in the mid-teen percentages over 2002, profits at the credit-card business will be down this year by a mid-single-digit percentage, Mr. Lacy said.
He also acknowledged during a speech to an analysts' conference in New York that Sears' traditionally strong business of tools, appliances. and electronics is feeling intense competition from Lowe's and Home Depot, particularly for low-priced merchandise.
Sears reportedly is the nation's leading appliance seller, with a 38.5-percent share of the U.S. $21 billion U.S. appliance market. Home Depot is working toward a greater share of the market by installing new showrooms in its stores to give shoppers a better idea of how appliances and kitchen cabinets would appear in their homes. Last year, Home Depot replaced Best Buy as the No. 3 appliance seller with a 6.4-percent share, according to a report by Stevenson Co., a Louisville, KY, U.S. forecasting analysis firm. Lowe's share of the market stands at 13.7 percent.
Mr. Lacy said Sears plans to change its sales commission structure and add more floor space to lower-priced goods to counter its newly aggressive rivals. (Chicago Sun-Times)
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