Sears Boss Wants To Speed Changes

In Arthur C. Martinez’s office, two powerful beasts collide with concussive force in a tabletop sculpture.

One could be Martinez, the numbers-gnasher Sears, Roebuck and Co. hired away from Saks Fifth Avenue nearly three years ago to revive its retail business. His opponent: Sears’ old corporate culture, which Martinez says has proved more resistant to change than he imagined.

As he ascends to the Sears chairmanship today, succeeding retired Edward A. Brennan, Martinez is determined to accelerate his shakeup of that culture, from resentful workers who call him “the man from Saks with the ax” to complacent longtime suppliers.

“Speed, speed, speed,” Martinez said, tapping his desktop with a small folding ruler. “The biggest issue … is just getting everybody to have an attitude that we’re going to do it today, we’re going to make it happen today, we’re going to change what we need to change today to make tomorrow better.”

Martinez, 55, figures Sears is about midway through a transition from the lumbering, tradition-bound Big Store he encountered to the agile, multidimensional retailer he envisions. Half the 800 department stores have been remodeled to make more room for highly profitable women’s apparel, and Sears is rapidly opening freestanding hardware, furniture and rural “authorized dealer” stores.

Martinez (pronounced MAR-tin-ez) kick-started the turnaround in 1993 by killing the venerable Sears catalog and closing 113 stores, eliminating 50,000 jobs.

His plan to make Sears among the most profitable U.S. retailers in each of its business lines depends upon steady sales growth and a “consistent, persistent, relentless focus on taking costs out of our business.”

Few observers doubt Martinez’s resolve after two years of 8 percent-plus sales growth at stores open at least a year - an industry measure - and an 18 percent increase last year in merchandising net income, to $890 million.

“I think they will be able to get their expense structure trimmed down further,” said retail analyst Steven Schuster of First Manhattan Co. “That’s one of my causes for optimism.”

Martinez has lifted Sears’ profit margins while reducing merchandise selling prices by aggressively cutting costs. He capped salary increases at 1 percent and put greater emphasis on incentive pay and commissions, pressuring employees to prove their worth.

“What we’re saying to our people is ‘You’ll have the same earnings power, but it’s got to come through performance,”’ he said.

Young Sears workers embrace such edicts, delivered with crystalline clarity by a boss whose white-blond hair and icy blue eyes mask a Cary Grant-like charm.

“He’s a savior, in my opinion,” said Joe Spinello, a Chicago store manager of men’s apparel who graduated from college two years ago. “He makes decisions based on what’s good for the business, not on friends or loyalty.”

But some older workers fear for their wages, benefits and jobs.

“A lot of people, while they’re not superthrilled with what’s going on, they’re going to go along with it because they have no choice,” said Larry Girten, a Chicago appliance salesman in his mid-50s.

Girten said his income will drop more than $5,000 this year, to about $30,000, due to reduced commissions on the refrigerators, washers and dryers he sells.

Large-appliance salespeople were particularly irked in late July, when Sears could not offer prompt delivery of Kenmore refrigerators it had on sale. Girten and two salesmen at another store, in Mishawaka, Ind., said customers walked out because the merchandise wasn’t in stock.

The problem reflected a temporary shortage of a part at the manufacturer, Whirlpool Corp.