Chip Off the Same Block

When he left Montgomery Ward to join its more or less moribund mail order rival, Sears, Roebuck & Co., as vice president 44 years ago, General Robert Elkington Wood brought with him a long catalogue of eccentricities.

Head of the Army quartermaster corps in World War I, he liked to urge fellow executives to "Charge!" Enamored of detail, he pored over endless reams of census and population statistics while gobbling caramels — cellophane wrappers and all. Out of all that charging and chewing came a discovery that still shapes U.S. merchandising. "Imagine it," Wood recalls. "The country was filled with talk about the automobile. Henry Ford was making shopping mobile; yet not a single retailer saw what the impact would be." Except for Retailer Wood, that is. Reckoning future population trends on the basis of his own census studies, Wood badgered Sears into opening its first retail stores, initially in the Midwest and the West. Some of the early stores served only small neighborhoods —which have long since become some of the nation's busiest urban and suburban areas.

Big & Bigger. Wood's coup, and others to come, earned him Sears's presidency in 1928, its chairmanship in 1939, and promised Sears unchallenged retailing superiority for decades ahead. In the years between Wood's arrival and his retirement next week from the company's board at 88 (he gave up the chairmanship in 1954), Sears has grown from a rural mail-order house doing a $200 million-a-year business to a vast corporation with sales of more than $500 million a month. Its 50-state organization includes 809 full-line stores, 1,731 smaller catalogue, retail and telephone sales offices, and eleven big catalogue mail centers. As of today, one of every three U.S. families shops at—or from—Sears.

Big as it is, the company can only get bigger. Over the past decade, its net sales have grown by 97% to 1967's $7.3 billion, while profits have more than doubled to $384 million. It has long since outstripped its old rival Montgomery Ward (1967 sales: $1.9 billion), is approached only by aggressive J. C. Penney Co. ($2.7 billion). Last week Sears Chairman Gordon Metcalf, 60, reported first-quarter 1968 gross sales of $1.9 billion, a 13.9% rise over last year's first three months. Says Metcalf: "Nothing that I can see will change our direction."

Currently, that direction points toward $10 billion annual sales in 1970, a goal that will be easily exceeded if the company maintains its current a-year growth rate. Wood's own ideas are still generating much of that impressive growth. Simple expansion, which he daringly pressed after World War II when competitors were fearfully holding back, is one factor: Sears's $190 million expansion plans for this year include 35 new stores, nine of them in Eastern states where sales have jumped by 63% since 1962. Another still-blossoming Wood notion is insurance. Sears's Allstate subsidiary is the nation's second largest auto-insurance company, now generates about 20% of Sears's revenue.