Other Free Encyclopedias » Brief Biographies » Biographies: Al Loving Biography - Loved Painting from Early Age to Alice McGill Biography - Personal » Arthur C. Martinez: 1939—: Businessman Biography - Learned Value Of Money From Parents, Gained Corporate Experience, Revamped Sears, Found The Softer Side Of Sears

Arthur C. Martinez: 1939—: Businessman - Revamped Sears

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In 1992 Martinez became the chairman and CEO of the Sears Merchandise Group. Sears started as a watch company in 1887, founded by Richard W. Sears and Alvah Curtis Roebuck, which quickly grew into a business supplying a wide variety of products. The core of the company was the Sears catalog that targeted rural America, which did most of its shopping by mail. In the 1920s Sears became a retail store under the leadership of Robert Elkington Wood. For the next several decades, Sears adapted to changes in American life, such as the growth of cities and the spread of automobiles, and to changes in the American consumer, and the company flourished. According to Martinez in The Hard Road to the Softer Side, "Sears became the business model for big-store retailing. It was offering the right products in the right places at the right prices."

However, in the 1970s and 1980s, Sears began to suffer financially. The company had begun selling banking services, insurance, real estate, and stocks instead of focusing on what it did best, which was selling merchandise. The company made two mistakes which were nearly fatal. First and foremost, Sears had ignored its customers. The company that was built around the idea of being in touch with its customers had abandoned them. Second, Sears lost track of its competition. Discount stores, such as Kmart and Wal-Mart, as well as specialty stores, such as Home Depot and Circuit City, were luring customers away from traditional department stores like Sears.

In the year that Martinez joined Sears, the company had lost $3.9 billion and $3 billion of that amount came from the merchandising department. "It would be presumptuous to say I knew exactly what I was going to do when I walked in the door, but it was pretty clear that dramatic action was called for. It was not a situation where incremental improvement was going to be sufficient," Martinez told Terry Savage of the Chicago Sun-Times about the state of Sears when he joined the company. Within the first one hundred days in his new position, Martinez made some dramatic changes at Sears. The company had already sold many of its other businesses, such as banking and real estate, which allowed Martinez to focus on retail. His first decision was to end the venerable Sears catalog, which had been in circulation for over 100 years. While it was a sentimental favorite among the Sears employees, the catalog was losing $1.5 billion annually. Additionally, Martinez closed 113 stores and laid off 50,000 people. Martinez was quickly dubbed "the man who killed the catalog" and "the ax from Saks," but he was convinced that these tough decisions were necessary to save the company.

Martinez also focused on changing the corporate culture at Sears, which had contributed to the company's poor performance. Martinez aimed to make managers accountable for how well their particular areas performed. He replaced the 29,000 page Sears rule book with a new and simpler mission. "We wanted Sears to be compelling to work for, to shop at, and to invest in," Martinez explained in his autobiography. He also invested in improving the company's infrastructure, particularly with respect to communications and computers.

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