Sears Up, Wards Down

Since World War II, Chairman Robert E. Wood of Sears, Roebuck & Co., No. i mail-order house, has gone in for freehanded expansion, spent around $300 million to increase its retail outlets from 610 to 694 and another $26 million to open 24 stores in Latin America. On the other hand, crusty old Sewell L. Avery, 80, chairman of Montgomery Ward & Co., the No. 2 mail-order house, has been expecting a bad depression, has closed down an estimated 31 stores and shortened leases on others.

Last week the results of both policies were reflected in earnings statements for 1953. Sears's sales bulged to a record $2,981,925,186, up 1.7%, and earnings were up even more, from $110 million to $118 million. Ward's sales fell 7.9% to $999,123,379 (below $1 billion for the first time since 1946), and net profit dropped from $49 million to $41 million. But in one balance-sheet figure, cautious Montgomery Ward--"the only bank with a store front"--had the edge. Ward owed no money, and its cash of $23 million and Government securities of $270 million were equal to about $45 a share on the 6,502,378 shares outstanding. Sears owed $200 million, and its $320 million in cash and $9,000,000 in securities equaled only about $13.50 a share on their 24,210,454 outstanding shares. But investors seemed to prefer a company that has its cash working in the business to one that puts its money into safe, low-yield investments. Ward's stock had been edging down in the last year while Sears's has held steady. Stock prices at week's end: Ward's 59 3/4, Sears's 59 5/8.

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