Corporations: The Four Ms of Sears

With faulty hagiography but understandable awe, the chairman of one large competitor calls it "the greatest organization since the church was founded by St. Paul." Adds the more mundane chief of another rival: "It is the General Motors of the industry. I sometimes feel like Studebaker." The object of such admiration is Sears, Roebuck and Co. Although it ranks second to the A. & P. among all U.S. merchandisers, Sears is the best-managed and most profitable of the nation's retailers. And it never seems to stop growing. Next week, reporting on fiscal 1963, Sears will announce that for the first time in its 77-year history it has crossed the $5 billion sales mark, running up a 12% sales increase that is almost double the yearly rise of its nearest competitors.

Sears has 755 retail stores (and 30 more abuilding) spread through every state, 1,065 catalogue outlets, 24 Simpsons-Sears stores across Canada, and 64 stores in Puerto Rico and Latin America. One U.S. family out of every three shops at Sears; it accounts for 6.2% of U.S. retail sales in the general lines of merchandise carried by the company, and its share of the home-appliance market ranges up to 25% of all the automatic washers and dryers sold in the U.S. Among Sears's 250,000 employees are 500 buyers, each of whom generally enters more orders every year than the combined buying staff of a big-city department store.

Men Come First. Not content with this vast range of retail sales, Sears is working hard to win even more of the consumer dollar. To add to its Allstate Insurance, which is the second largest U.S. auto underwriter and now deals in life insurance too, Sears recently received permission from the Securities and Exchange Commission to set up its own mutual fund. Through subsidiaries—Homart Development, Allstate Enterprises—it also operates two building and loan associations and shopping centers. It runs an automobile club, is experimenting with auto financing, is thinking of going into auto leasing and the small-loan business.

The guiding hand in this rush of activity belongs to Chairman Austin T. ("Joe") Cushman, 62, who seems too soft-spoken and shy to be chief executive of a bullish corporation like Sears. "I met him at dinner one night," says one Chicago businessman, "and it took me all evening to discover that he ran Sears." Inside the company, Cushman is not so reticent. Unlike retired Predecessor Charles H. Kellstadt, whose job he took over two years ago, Cushman delegates responsibility liberally and treats subordinates genially, but keeps a cold eye on profit and loss reports. "Men, merchandise, methods and money," he is fond of saying, "are the four Ms of Sears. Men come first."

A Weak Link. The men of Sears usually display a prescience that has helped the company pull away from such competitors as Montgomery Ward and J. C. Penney. Long before World War II, convinced that automobiles would revolutionize merchandising, Sears pioneered residential stores surrounded by parking space; the postwar rush to the suburbs reaped spectacular sales. The proliferation of discount houses has had little effect on Sears: 95% of its merchandise is in house brands (Allstate, Kenmore, Homart, Silvertone) that discounters cannot carry and that, in any case, are generally priced 20% under competing brands.