Hoffman Estates, IL, Oct. 25—Sears Roebuck & Co. is trying to reinvent itself among increasingly finicky consumers who have turned their backs on department stores. In response, the 115 year old retailing icon is now doing the same.

Making good on the promise he made when he became chief executive a year ago, Alan Lacy said he'll overhaul all 860 stores as well as its operations and organizational structure in a company wide plan that also would leave 4,900 workers jobless.

Tired of its upper end electronics and appliance customers barely noticing the company’s apparel offerings, Sears is restocking those sections with a smaller, more focused line of moderately priced clothes.

"We're recycling our merchandise assortment and resetting our marketing mix," Lacy said, aiming to be more competitive against stand alone rivals such as Kohl's and Best Buy. If the plan is successful, Sears will take in an additional profit of $1 billion in three years while remaking the image and operations of one of the nation's oldest retailers.

"We need to be uniquely positioned," Lacy told analysts. "We're moving away from the department store model," he said. "That's how we've competed forever. It's not working, and that has to change."

Change isn't new for Sears. During the last two decades alone, the retailing giant has been the place "where America shops." It has seen "the softer side of Sears." And it has lived "the good life at a great price."

It has shifted gears into the soft lines side of retail, such as apparel and jewelry, only to find that its hard lines of big appliances and tools were bigger draws. Sears pulled out of the mattress market, but jumped back in earlier this year. Last summer, it dropped Avon to sell a new line of cosmetics, then decided to get out of the business altogether next year. And although Sears sells more treadmills than any other retailer, it stopped selling bicycles, as well as swing sets, pools and basketball equipment this year.

All this change comes at a cost. Lacy told analysts not to expect top line growth in the near term, and he prepared them to record charges against fourth quarter earnings. With this latest change, Sears is looking to create a whole new niche.

"We're not a discounter. We don't want to be. We also don't want to be a department store," Lacy said. "We want to be Sears."

Whether or not Lacy is successful will depend on a smooth execution of an aggressive plan to simplify what and how Sears sells. It will also hinge on an accommodating economic climate. With no immediate plans to close any of its stores Lacy has some analysts wondering whether the strategy may be too ambitious. The plans call for a simpler, cohesive and consistent image in its signs, brand strategy, operations and marketing. Although Lacy stressed that he doesn't want to join the world of discounters, the strategy he outlined looks a lot like Kohl's—one that has been very successful of late.

Calling Sears' brand strategy chaotic and confusing, Lacy is culling it to one megabrand that will roll out next year and cut across women's, men's and children's casual wear and will replace a bevy of under performing names. He expects to pare down to only a few other store brands, such as Apostrophe, Laura Scott or Barrington in dress wear.

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