Sears Roebuck closes the book and cuts out 50,000 staff

A CENTURY-OLD tradition of American retailing came to an end yesterday with the announcement by Sears Roebuck that it plans to close its famous mail-order catalogue business. The spring 1993 'Big Book', which includes tens of thousands of household items ranging from lawnmowers to undergarments, will be Sears' last, the Chicago retailer said.

The end of the catalogue, first published in 1895, is the final piece of a restructuring that will see Sears sell its financial services subsidiaries, close hundreds of stores and shed 50,000 of its 350,000 sales staff. The reorganisation, begun last September, will cost dollars 1.7bn, dollars 800m of which will cover closing the money-losing mail-order operation, which now employs some 20,000 people.

The Sears catalogue, a victim of the discount store as much as of modern marketing techniques like direct-response telephone sales and home-shopping cable television, has long been the stuff of American legend. In its early days, it played the role of general store to thousands of farm communities in the American West, offering a vast range of products otherwise unavailable outside large cities.

In many farmhouses, the 'Sears and Roebuck Catalog' sat alongside the family Bible. It later suffered from the popularisation of the car, forcing Sears to open display stores on cheap land on the edge of bigger towns. But the catalogue survived because of its good value and unparalleled variety.

In the 1980s Sears embarked on a dollars 38bn diversification plan, buying insurance, brokerage and property companies.

But American buying habits have changed radically, and Sears' sales have been savaged in recent years by the rise of cost-conscious discounters. The catalogue alone has lost the company an average of dollars 150m a year since 1989, despite sales of more than dollars 3bn annually.

Sears' grand plan - widely derided as 'socks and stocks' - was finally derailed last year by a revolt among shareholders, who saw the retailer slip to third place behind Wal-Mart and K-Mart. Its core merchandising unit lost dollars 36.4m in the third quarter of 1992, its most recent set of results.

By the end of the year, the financial services subsidiaries, which provided Sears with two thirds of its dollars 1.6bn profit in 1991, will be spun off as independent companies, moving dollars 20bn worth of debt from its balance sheet and raising about dollars 3bn. Yesterday's cuts should save almost dollars 300m annually for Sears, which is no relation to the British shoes-to- Selfridge's retail group of the same name.

Sears shares gained 1 7/8pc to 50 3/4pc on the news.