Sears' Net exchange grows

While Sears, Roebuck and Co. continues to search for a new CEO,the giant retailer scored another e-commerce coup Thursday. But legaltroubles with a media buying company and former Sears employeesremain hurdles.

Two foreign retailers are the first to join Hoffman Estates-basedSears' online exchange that lets retailers and suppliers transactbusiness in real time. Germany's Metro AG and British retailconglomerate J Sainsbury PLC join founding partners Sears, Paris-based Carrefour and Oracle Corp., of Redwood Shores, Calif., in theWeb-based business-to-business marketplace, called GlobalNetXchange,Sears said.

The four retailers account for $140 billion in purchases annuallyfrom more than 50,000 suppliers, partners and distributors worldwide.

Yet the e-commerce venture's future remains cloudy because Sears'biggest U.S. competitor, Wal-Mart Stores Inc., has expressed nointerest in joining.

Indeed, Wal-Mart has expanded its Retail Link, in which itssuppliers access and share data over the Internet, and will launch aSamsClub.com Web site this summer that might offer online auctionsfor business and Advantage members, Wal-Mart spokeswoman MelissaBerryhill said Thursday.

Separately, Sears fired its media-buying company, Santa Monica,Calif.-based Focus Media Inc., and filed suit alleging that Focusfailed to pay for media commitments it had made on Sears' behalf. "Wehad asked Focus for a complete accounting of the payments we had madefor the media obligations they'd incurred on our behalf," Searsspokeswoman Jan Drummond said Thursday. "They declined to providethat, so, unfortunately, we had to take this step."

Focus filed a countersuit in Los Angeles Superior Court on March13, alleging that it suspended payment to the media because Searswouldn't pay the company. Focus also claims that Sears ignored anagreement to give Focus one year's advance notice before it canceledthe contract, and that Sears has wrongfully obtained a judge's orderfreezing Focus' bank account until a court hearing next week.

Focus, which is seeking at least $100 million in damages, isrepresented by Bertram Fields, a Los Angeles attorney known forrepresenting the Beatles, Tom Cruise and former Disney Co. executiveJeffrey Katzenberg.

In a separate court case, U.S. District Judge James Moran ruledlast week in Sears' favor in a dispute with its retirees over theretailer's decision to cut their life insurance benefits.

Sears aims to save $60 million a year for 10 years by reducing thecompany-paid benefits from a maximum $100,000 to $5,000 a year. Searscontends that it consistently told retirees it could change allbenefits, including the insurance, at any time.

The retirees, who maintain a Web page, are still fighting for thecourt to consider their allegation that Sears breached its fiduciaryduty. The ruling denies them class-action status, however.

Sears also filed documents with the Securities and ExchangeCommission showing that outgoing CEO Arthur Martinez will be paid a$2.2 million bonus for 1999.