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By Genevieve and Lauren. History. Sears - agent of railway station in MN Sears - sold lumber and coal to locals Received a shipment of watches (unwanted by local jeweler) sold watches at a profit to other station agents along the line Kept ordering more and kept selling. History.
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History • Sears - agent of railway station in MN • Sears - sold lumber and coal to locals • Received a shipment of watches (unwanted by local jeweler) sold watches at a profit to other station agents along the line • Kept ordering more and kept selling
History • 1886: Sears began “R.W. Sears Watch Company” • 1887: Moved business to Chicago • Hired Alvah C. Roebuck • 1893: Firm = “Sears, Roebuck and Co.”
History • Sears: genius of mail-order firm • 1925: first retail store opened • During Depression: opened stores • Had 600 stores by the time WW2 started
History • 1931: Allstate Insurance Co. became Sears subsidiary • 1953: Sears Canada Ltd. Became a subsidiary • 1980: Sears, Roebuck and Co. formed corporate office- renamed “Sears Merchandise Group” – also renamed insurance to “Allstate Insurance Group”
History • 1981: New subsidiaries: - Dean Witter Reynolds Organization,Inc. - Coldwell Banker & Company • 1985: Discover Card • 1999: Sears.com
Goods • Appliances • Automotive • “BabyMe” • Computer & Office • Electronics • Fitness and Recreation • Household Items • Jewelry and watches • Lawn and Garden • Tools
Services • Product installation • Service Contracts • Installed Home Improvements • Repair Services • Carpet Cleaning • Sears Direct new products via • Catalog • Telemarketing • Direct mail • Internet
Subsidiaries • Allstate Insurance Company • Great Indoors- Home Improvement Store • Sears Canada Inc. • Sears Auto Centers
Problems Debt Securities – Interest rate risk Losing Market share to discount stores or specialty stores over the last year After Christmas season small decrease most years (typical for retail stores)
Major competitors • Wal-Mart (compared on next slides) • Target • JC Penney • Federated Department Store • May Department Stores
New Ways of Doing Business • Self service departments • Centralized Checkouts • Sears.com and Wishbook.com New Markets • Great Indoors- Home Decorating and remodeling store • 11 stores added in 2001 in the U.S.
Net Income Years (In Millions) • 2000 1,343 • 1999 1,453 • 1998 1,048 • 1997 1,188 • 1996 1,246
Analysis • This year- beating Standard and Poor’s index • Improving inventory control • Approximate value: 52.40 dollars • Only go up • Retail store sales = increasing • Four domestic segments: • Retail • Services • Credit • Corporate
Analysis Continued • Carries many items • Has many markets • Projected EPS growth in 2002, 2003 = 13% • Lower price to earnings ratio = good buy • Comparison: P/E ratio: Sears, Wal-Mart • Wal-Mart = 42 • Sears = 23.3 • Stock price: increased 29% last 52 weeks and 12% this year
Analysis Continued • Long-term industry lookout = positive • Schwab: 12 months: price = $64.9 • Standard and Poor: Sears = “buy”
Analysis Continued • Creating self-depots • Has new “Great- indoors” stores • Time to buy stock = now