SEARS DISMANTLES STAND-ALONE MULTICULTURAL MARKETING UNIT

Functions Merged Into General Marketing Operations

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NEW YORK (AdAge.com) -- Sears, Roebuck & Co., one of the country's largest buyers of multicultural advertising, is dismantling its stand-alone multicultural
Sears is one of the country's largest buyers of Hispanic advertising.
marketing department and merging that unit's staff into the general marketing and merchandising departments.

Executive changes
The move follows the retirement of Billye Alexander, vice president of multicultural management. Joan Chow, vice president of marketing, has been assigned an expanded role overseeing multicultural marketing, according to the company.

"We believe [this] will further strengthen our marketing efforts," a Sears spokeswoman said. "It quickens decision-making and also moves functions to a higher and broader level of alignment."

Heavy Hispanic spending
Sears spent $119 million in Spanish-language advertising media buys in 2003, according to TNS Media Intelligence/CMR, just behind Procter & Gamble Co. and ahead of General Motors Corp. Sears spent 20.9% of its 2003 ad budget on the Hispanic market, according to an analysis of ad spending by the Association of Hispanic Advertising Agencies.

One executive familiar with the Sears organization suggested the move showed a "lack of vision" on the multicultural issue.

But Saul Gitlin, executive vice president of strategic marketing services and new business at multicultural specialist Kang & Lee Advertising in New York (a Sears roster agency), pointed out that other Kang & Lee clients, such as Pernod Ricard, don't have separate multicultural departments. Mr. Gitlin declined to comment specifically about Sears.

Commitment to multicultural
He said separate departments are useful in companies just starting in the market or where there is resistance, in order to signal multicultural's importance to the organization. But, he said, there are "clearly companies for which multicultural marketing is not a stand-alone function. It need not have any significance to the commitment to multicultural" marketing.

Sears has been struggling to fight off increased competition from rivals including big-box retailers, discounters and a rejuvenated JCPenney chain. Home-improvement chains such as Home Depot and Lowe's have been cutting into Sears' keystone appliance business, while fashion-forward discounters such as Target Stores are siphoning off young apparel shoppers. The company last week posted a 2.6% drop in comparable-store sales in July and is 1.8% behind 2003 for the year to date.

Looking beyond roster shops
The company recently sought out work from agencies beyond its usual roster, led by WPP Group's Ogilvy & Mather and Y&R Advertising. According to executives close to the situation, WPP's Berlin Cameron/Red Cell, New York, presented work, but Sears ultimately assigned Ogilvy to handle the fall campaign.

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Laurel Wentz contributed to this report.
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