November 28, 2005

Sears Vice Chairman Outlined Benefits of K-Mart Merger

Sears is expanding out of malls to be closer to customers' homes, and K-Mart customers are gaining access to more name brands. These are just two of the benefits of the Sears/K-Mart merger, according to Alan J. Lacy, vice chairman of Sears Holding Corporation. Lacy discussed the merger of the two retail icons at the M.J. Neeley School of Business' Charles Tandy Executive Speaker Series on November 4, 2005.

Lacy's appearance on the TCU campus resulted in record attendance for the popular breakfast event, which is offered to the community four times a year through the Neeley School of Business.

In his address, Lacy covered the history of both companies, from the popular Sears catalog introduced in 1886 and the opening of S.S. Kresge Co.stores in 1889, to the 2004 merger into Sears Holding Corporation, the 3rd largest retail company in the U.S. with 4,000 locations and $36 billion in sales last year.

As former CEO of Sears, and the 13th in Sears' 117-year history, Lacy offered unique insight into the economics and internal workings of a major merger. He discussed how the merger converted 400 K-Mart stores to Sears stores, thus expanding Sears' reach beyond shopping malls to convenient, free-standing locations close to customers' homes. Lacy pointed out how the neighborhood locations help Sears compete against Wal-Mart and Target stores in higher income areas.

The merger also brought better and more brands to K-Mart shoppers, along with home delivery. And, the Sears credit card is now accepted at all K-Mart locations.

Lacy detailed the economic benefits of the Sears/K-Mart merger, such as larger procurement opportunities and increased supply chain capabilities. He also covered the impact of the merger on employees of both companies. While it initially reduced employees by 80,000, the similarity of the two retail companies allows for fluidity of employees between Sears and K-Mart. Employees now have standardized compensation and benefit plans.

Lacy concluded his talk by revealing that stock prices rose as a result of the merger. Prior to the merger, K-Mart was at $45 per share and Sears was at $35 per share. The merged stock is now $60 per share.

Lacy joined Sears as senior vice president of finance in 1994, and became executive vice president and chief financial officer the following year. He was appointed president of services before becoming CEO and chairman of the board of directors in 2000.

The Charles Tandy Executive Speaker Series is held four times a year on the TCU campus. Tickets are $20 and include a full breakfast. The Executive Speaker Series is a community outreach program designed to develop and disseminate leading-edge thought in order to improve the practice of business.

On February 7, 2006, Travelocity President and CEO Michelle Peluso will be the featured speaker. The speaker for the April 11th breakfast will be Robert McCann, executive vice president for Merrill Lynch & Co. Inc. and vice chairman and president of
Global Private Client Group.

To attend upcoming events, call 817-257-7115 or go to .


Elaine Cole, External Relations, Neeley School of Business