Sears, Roebuck & Co., making a dramatic break with its long tradition of promotion from within, announced yesterday that it has gone outside the company for a chief executive to lead its troubled retail division.
Chicago-based Sears, which has moved far beyond its roots as a retailer, said Arthur C. Martinez, 52, vice chairman of Saks Fifth Avenue, will become chairman and chief executive of the Sears merchandise group Sept. 1.
He will succeed Edward A. Brennan, Sears' chairman and chief executive officer, who has filled those positions at the parent company and at the merchandise group since Sears veteran Michael A. Bozic was ousted as the merchandise group's head in August 1990. Mr. Brennan, 58, will remain chief executive of the parent company.
As head of the merchandise group, Mr. Martinez will be responsible for most of the activities the public associates with the Sears name, including the chain's hundreds of department stores, its catalog and its credit card operations.
For Sears to look outside its ranks for the leader of its core retail operations would have been unthinkable as recently as five years ago, said Walter Loeb, retail analyst with Loeb & Associates.
For most of this century, the Sears tradition meant lifetime careers and a deep reluctance to take in outsiders who had not come through the ranks.
Mr. Martinez is "more of a control and financial person than a fashion person," said Mr. Loeb, who, like other analysts, applauded the choice.
The ascension of someone who is not career "Sears man" to the top retailing job shows how much the merchandise group has changed in recent years.
The Sears chain is still huge -- with $31.4 billion in revenues at about 4,000 department, catalog and specialty stores worldwide. But in 1990, Wal-Mart soared past Sears as the nation's No. 1 retailer, while Kmart muscled into second place.
For the past two years, Sears' earnings have remained respectable only because of its financial-services operation, which include Allstate Insurance, Dean Witter Financial Services and the Coldwell-Banker real estate network.
Recently, the merchandise group has been plagued by stagnant sales, staff cuts and embarrassing revelations about unnecessary repairs performed by its automotive centers.
Despite eliminating 48,000 jobs and overhauling its retailing approach, the merchandise group has continued to trail other major retailers. Second-quarter income from the retail operation fell to $78.5 million from $156.9 million a year earlier.
Gerald E. Buldak, a Sears spokesman, said Mr. Martinez's previous job as group chief executive of the retail division of Saks' parent Batus Inc. gave him broad experience on the selling end of the business.