Sears retools into five units

Facing declining sales and growing scrutiny of its Internet privacy practices, Sears Holdings Corp. said recently that it is revising its organiza­tional structure and operational model, with the intention of simplifying the way its business lines are managed and creating greater autonomy and focus for the business management teams.

The new structure will be built around five types of business units: operating businesses, support, brands, online and real estate. Each business unit will have a designated leader and an advisory group composed of senior Sears Holdingsexecutives.

There will also be a separate, internal profit and loss statement for each indi­vidual unit to allow for greater focus on managing the profitability of the unit and rapid decision making to capitalize on opportunities.

When reached for comment, Sears pointed to a statement. In it, Edward S. Lampert, chairman of Sears Holdings, said, “It’s time to empower individual businesses and teams to focus on the customer experi­ence and performance. Stronger business units will be better able to support each other, build a stronger company, and be more attractive to partners and talent.”

Shares of Sears Holdings Co. jumped $10.42, or 11%, to $99.85 after the announcement on January 22.

Earlier this month, Sears said that domestic comparable store sales for the nine-week period ended Jan. 5 for its Kmart and Sears stores declined 3.5%.

The operating business units will consist of the company’s current lines of business such as home appliances, electronics and apparel.

The support units include functions that provide operational and administra­tive support to the operating businesses, including marketing, store operations, customer strategy and finance.

The brand units will be responsible for growing the value of Sears Holdings brand portfolio. The real estate and online business units will focus on increasing the sales productivity of the company’s physical and virtual real estate.  

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