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Notes to Consolidated Financial Statements

 

NOTE >3 > RESTRUCTURING CHARGES

The Company implemented certain cost-reduction strategies during the third quarter of 1999 resulting in a $46 million pretax restructuring charge. Of the $46 million charge, $25 million relates to the closing of 33 automotive stores in three geographic markets and $21 million relates to severance costs for headquarters staff reductions of approximately 450 employees. The staff reductions and the closing of the 33 stores both occurred during the third quarter of 1999. Of the $25 million charge for the 33 closed stores, approximately $3 million relates to severance costs, $21 million is to reduce the carrying value of the closed store assets to their estimated fair value, less costs to sell, and $1 million is for other related costs. As of January 1, 2000, future cash payments to settle restructuring obligations approximate $16 million, which is expected to be paid primarily in the year 2000. The Company paid $20 million of the restructuring costs during the fourth quarter of 1999 resulting in a restructuring reserve balance of $26 million as of January 1, 2000.


  Annual Report 1999 

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1999 Sears, Roebuck and Co. - www.sears.com