NEW YORK — Sears Merchandise Group expects apparel sales to grow in the high single digits in 1994, propelled by the success of its “Softer Side of Sears” advertising campaign and its push for more branded goods.
Arthur C. Martinez, chairman and chief executive officer, said the company plans to continue adding branded merchandise. Currently, the Sears mix is about 40 percent branded to 60 percent private label. Its goal is a 50-50 split.
Speaking at the company’s annual breakfast for Wall Street analysts Tuesday in the New York Hilton, Martinez said Sears sees strong opportunities for growth in cosmetics, costume and fine jewelry, special sizes and accessories.
He put the overall projected same-store sales gain at 4 to 5 percent in 1994.
In 1993, total apparel sales rose 15 percent, led by a 41 percent jump in juniors. Other leading gainers included footwear, up 27 percent; women’s sportswear, up 17 percent, and men’s wear, 14 percent.
Martinez noted that the company added $328 million in after-tax savings to the bottom line last year, substantially ahead of the $200 million after-tax savings that had been expected. He pointed out that Sears Merchandise Group chalked up a 9.1 percent increase in same-store sales, well ahead of the 6 percent achieved by Wal-Mart Stores.
Martinez also pointed out that the company reduced selling, general and administrative expenses to 25.4 percent of sales in 1994, beating its target of 25.7 percent. In 1992, the SG&A ratio was at 26.6 percent. Martinez said the company still plans to reduce this rate to 23 percent by 1997. As part of Sears’ restructuring, 49,900 jobs were cut, including 20,300 from discontinued operations and 29,600 from continuing operations. At the same time, Martinez noted, the company added 10,000 full-time employees to its selling floor.
A big factor in Sears’ success, Martinez noted, has been its ability to improve attitudes both in the workplace and with the public As part of its workplace strategy, the company also brought in fresh talent at each level, something Martinez referred to as “new people for new thinking.”
At the executive level, 44 percent of management was new; senior managers, 31 percent; regional general managers, 40 percent; district general managers, 28 percent; store general managers, 29 percent, and sales managers, 15 percent.
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Martinez also noted that Sears’ 16 tested specialty catalogs had total sales of $165 million and showed a profit in the first year.
The Sears charge card also had a strong year despite the company’s decision to start accepting Visa, American Express and MasterCard in August. The Sears card increased in usage to represent 57 percent of sales from 54 percent in 1992. Overall credit card sales accounted for 72 percent of sales in 1994.
In the question-and-answer session, Martinez said the company was not planning on lowering its Sears credit card rate, which is about 18 to 19 percent, compared with 10 to 13 percent on the major cards.