Sears Acquires 18 Wards Stores, 10 Auto Centers in Select Markets

Company to Integrate Wards Assets, Employees Into Department Store, The Great Indoors and Home Services Businesses

In a significant expansion of its retail and national product service businesses, Sears, Roebuck and Co. will add 18 former Wards department stores and 10 freestanding auto centers to its retail base, and could potentially service approximately 2.4 million former Wards service contract customers under an agreement with Aon Innovative Solutions, Inc. (AIS). In addition, Sears will acquire certain assets of Wards national repair business, A&E Signature Service.

Terms of the agreements were not disclosed.

Sears expects to close on the Wards stores by mid-April of 2001, and plans to remodel and reopen the former Wards retail locations by the spring of 2002. Four of the Wards locations will be converted to The Great Indoors, Sears innovative remodeling and decorating retail concept, which was launched in the Denver area in 1998. Fourteen of the former Wards locations will be converted to Sears stores, with Sears Auto Centers attached to three of these stores. The 10 freestanding former Wards Automotive Centers will be converted to Sears Auto Centers. Details regarding the purchase of an additional Wards location have not been confirmed. A list of the 17 confirmed store locations and 10 freestanding automotive centers is at the end of this release.

Since Montgomery Wards announced in December that it would cease operations, Sears has hired nearly 900 former Wards employees, including more than 300 former Wards product service associates now working at Sears locations nationwide and approximately 500 retail associates. A total of nearly 3,000 employees will staff the 18 department stores and 10 auto centers being acquired.

"By expanding our retail and product service businesses through the acquisition of selected Wards assets, Sears has an opportunity to build market share in several lines of our business," said Chairman and CEO Alan J. Lacy. "We will have denser full-line store coverage in key markets and an early start on our 2002 growth plan for The Great Indoors. Access to Wards former product service contract customers is an exciting opportunity for Sears Product Repair Services, which already has the nation's largest team of trained product technicians."

Under the agreement with AIS, Sears service technicians could perform product repair and maintenance services for approximately 2.4 million former Montgomery Wards customers with service contracts administered in 23 states by AIS and affiliates. Sears HomeCentral® technicians will provide repair services and preventive maintenance checks for appliances, electronics, exercise equipment and lawn and garden products previously served by Montgomery Wards.

In a separate agreement with Montgomery Wards, Sears Product Repair Services acquired the marketing rights to more than 5.4 million Wards customers, as well as intellectual property rights to A&E Signature Services brand names and related toll-free numbers for service scheduling and parts sales. Sears also purchased Wards' entire inventory of repair and replacement parts and accessories.

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially, including statements relating to the final acquisition of Wards assets, the conversion and reopening of stores, and the servicing of additional customers. These forward-looking statements are based on assumptions about many important factors, including satisfactory completion of real estate closings, construction schedules, receipt of third-party approvals (including government approvals) relating to the real estate, competitive conditions in the retail industry, consumer confidence, the number of servicing calls made available to Sears by AIS, and normal business uncertainty. Sears intends the forward- looking statements to speak only at the time of this release and does not undertake to update or revise these projections as more information becomes available.

Sears HomeCentral has the nation's largest team of product repair services specialists, with more than 12,000 trained technicians making approximately 14 million repairs annually. Appliance repair and maintenance may be scheduled 24 hours a day, seven days a week by calling 1-800-4-MY-HOME (1-800-469-4663), or by accessing Sears real-time online scheduling network through the company's Web site, .

Sears, Roebuck and Co. is a leading U.S. retailer of apparel, home and automotive products and services, with annual revenue of more than $40 billion. The company serves families across the country through approximately 860 department stores, approximately 2,100 specialized retail locations, and a variety of online offerings accessible through the company's Web site, .

  Listing of Confirmed Locations

  Sears Stores:
  Albuquerque, N.M. - Cottonwood Mall
  Annapolis, Md. - Annapolis Mall
  Bel Air, Md. - Harford Mall
  Crystal Lake, Ill. - Freestanding Store (U.S. Highway 14)
  Fort Worth, Tex. - Hulen Mall
  Glendale, Ariz. - Arrowhead Mall
  Hagerstown, Md. - Valley Mall
  Manassas, Va. - Manassas Mall*
  Meadville, Penn. - Meadville Mall*
  North Riverside, Ill. - North Riverside Mall
  Peru, Ill. - Freestanding Store* (1607 36th Street)
  Phoenix, Ariz. - Aracadia Crossing
  Pueblo, Colo. - Pueblo Mall

  *Stores with attached automotive centers

  The Great Indoors:
  Huntington Beach, Calif. - Huntington Beach (7777 Edinger Avenue & Beach)
  Pleasant Hill, Calif. - Freestanding Store (2302 Monument Boulevard)
  San Jose, Calif. - Oakridge Mall
  Towson, Md. - Towson Market Place

  Sears Auto Centers:
  Freestanding                            *Attached to Store
  Albuquerque, N.M. - Cottonwood Mall      Manassas, Va. - Manassas Mall
  Annapolis, Md. - Annapolis Mall          Meadville, Penn. - Meadville Mall
  Fort Worth, Tex. - Hulen Mall            Peru, Ill. - Freestanding Store
  Bel Air, Md. - Harford Mall
  Glendale, Ariz. - Arrowhead Mall
  Hagerstown, Md. - Valley Mall
  North Riverside, Ill. - North Riverside Mall
  Pueblo, Colo. - Pueblo Mall
  Phoenix, Ariz. - Aracadia Crossing
  San Jose, Calif. - Oakridge Mall

SOURCE: Sears, Roebuck and Co.

Contact: Peggy A. Palter, 847-286-8361, or Janice R. Drummond,
847-286-8316, both of Sears, Roebuck and Co.


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