In Business This Week: Headliner
Sears' Alan Lacy: From the Storeroom to the Store
What were they thinking? That's the response to news that Alan Lacy, 46, will take over as president and chief executive of Sears Roebuck when Arthur Martinez steps down on Oct. 1.
Lacy won praise for turning around Sears' ailing credit-card unit, which now accounts for 55% of operating income. Next he must persuade Main and Wall Streets that he can deliver on the floors of the aging store as he has in the back office. Says Skip Helm of the William Blair brokerage firm in Chicago: "I have a huge amount of respect for his financial abilities, but finance and credit is not its problem."
What is? Sears' marketing is widely criticized as uninspired, and management has lurched from strategy to strategy, selling off failed ideas such as freestanding furnishings stores. Overall sales of $41 billion a year have been virtually flat since 1997, and sales at stores open for more than 12 months rose at a meager 3.1% through August.
Lacy says he will be in "deep-dive mode" to learn about retailing.Edited by Aleta Davies; By Julie ForsterReturn to top
The FCC Gets Tough on AOL's Messaging
America Online and Time Warner are facing more heat from regulators before they close their $183 billion merger. Federal Communications Commission staffers reviewing the merger want to elicit a formal promise from AOL to open up its popular instant-messaging service within a specified time frame to users of competing services, say sources close to the agency. While AOL has promised to work with an industry group to come up with an open standard for the technology, rivals say the company has been dragging its heels. AOL won't comment on the FCC proceedings but says it supports open instant messaging as long as consumer privacy and security are protected.Edited by Aleta DaviesReturn to top
A Blow to Microsoft's .Net
Microsoft made its biggest bet in five years in June, when it unveiled .Net, its ambitious Web initiative. Seems as if the project wasn't enough for Group Vice-President Paul Maritz, one of the giant's most powerful execs and chief architect of the .Net strategy. He'll announce his retirement on Sept. 14. Maritz has talked about leaving for nearly two years and feels that with the .Net strategy hatched, now is the time. Still, .Net took flight largely because Maritz convinced colleagues that the audacious gamble was worth it. With Maritz retired, the odds on the .Net bet just got longer.Edited by Aleta DaviesReturn to top
Tech Investing Has Vroom to Go
Tech investors skittish? Don't tell New Enterprise Associates, the 22-year-old venture-capital outfit that will close a record-setting $2 billion fund on Sept. 15. Partner Richard Kramlich says getting investors to fork over millions was easy, in part because NEA avoided lots of now-troubled dot-coms. It has focused on telecom, Net infrastructure, and networking --the market's current sweet spot. Kramlich says NEA will need every penny for deals that now cost an average of $15 million apiece--more than double the amount three years ago. The latest: $55 million for Zhone Technologies, a telecom-gear maker.Edited by Aleta DaviesReturn to top