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By Genevieve and Lauren

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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By Genevieve and Lauren

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  1. By Genevieve and Lauren

  2. 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

  3. History • 1886: Sears began “R.W. Sears Watch Company” • 1887: Moved business to Chicago • Hired Alvah C. Roebuck • 1893: Firm = “Sears, Roebuck and Co.”

  4. History • Sears: genius of mail-order firm • 1925: first retail store opened • During Depression: opened stores • Had 600 stores by the time WW2 started

  5. 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”

  6. History • 1981: New subsidiaries: - Dean Witter Reynolds Organization,Inc. - Coldwell Banker & Company • 1985: Discover Card • 1999: Sears.com

  7. Goods • Appliances • Automotive • “BabyMe” • Computer & Office • Electronics • Fitness and Recreation • Household Items • Jewelry and watches • Lawn and Garden • Tools

  8. Services • Product installation • Service Contracts • Installed Home Improvements • Repair Services • Carpet Cleaning • Sears Direct new products via • Catalog • Telemarketing • Direct mail • Internet

  9. Subsidiaries • Allstate Insurance Company • Great Indoors- Home Improvement Store • Sears Canada Inc. • Sears Auto Centers

  10. 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)

  11. Major competitors • Wal-Mart (compared on next slides) • Target • JC Penney • Federated Department Store • May Department Stores

  12. March 2002

  13. 12 month period ending March 9, 2002

  14. 12 month period ending March 9, 2002

  15. New Products

  16. 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.

  17. New Competitor

  18. Net Income Years (In Millions) • 2000 1,343 • 1999 1,453 • 1998 1,048 • 1997 1,188 • 1996 1,246

  19. Net Income

  20. P/E

  21. Earnings Growth Rate

  22. Long term Debt to Capital Ratio

  23. 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

  24. 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

  25. Analysis Continued • Long-term industry lookout = positive • Schwab: 12 months: price = $64.9 • Standard and Poor: Sears = “buy”

  26. Analysis Continued • Creating self-depots • Has new “Great- indoors” stores • Time to buy stock = now

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