Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 1, 1995 TAG: 9507030041
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: BLOOMBERG BUSINESS NEWS
DATELINE: CHICAGO LENGTH: Medium
The spinoff, at $10.7 billion the biggest ever, marks the final break between Allstate, the nation's second-largest home and auto insurer, and Sears, the nation's No. 3 retailer.
The spinoff is not expected to affect Allstate's regional office in Roanoke County, which employs 750 people processing new business and policy endorsements for property and casualty insurance, or affect a small-claims office or independent sales centers in the local area, said company spokeswoman Kathleen Hogan. "The spinoff will neither affect our operations or our strategy," she said.
Duff & Phelps Corp. analyst Rick Nelson said, ``The company's focus will be better,'' and Sears now could be poised to expand through acquisitions of other retailers. With the Allstate spinoff, and sales of its other financial services businesses, Sears is back to the business of selling home appliances, tools and clothing to a mass market.
And after years of diversifying, the Chicago-based company is more of a plain-vanilla retailer than at any time since the start of the Great Depression. Sears sold 20 percent of Allstate's shares to the public in June 1993 for $2.36 billion and now has handed over the remaining 80 percent stake to Sears shareholders.
In trading Friday on the New York Stock Exchange, Sears shares rose $1.12 1/2, closing at $59.87 1/2 a share; Allstate's rose 37 1/2 cents to $29.75 a share.
The return to basic retailing is the end of Sears' big push into financial services in the 1980s. Sears -- then the country's No. 1 retailer -- thought it could sells stocks, real estate and credit cards to the same customers who bought its hardware and appliances.
Sears started Allstate - named after a popular Sears tire - in 1931 to sell auto insurance through its catalogs and stores. Sears relied heavily on Allstate and its other financial services units in the 1980s and early 1990s as its merchandise group floundered.
The insurer later became a drain on Sears as it racked up losses from Hurricane Andrew in 1992 in Florida, winter storms in the Northeast in 1993 and early 1994, and California's January 1994 earthquake.
by CNB