Sears to sell credit division, focus on retail.

Byline: Susan Chandler

When he took the helm at Sears, Roebuck and Co., Alan Lacy promised incremental change. Instead, he has delivered a series of bold strokes.

The latest came Wednesday when Sears announced it was putting its profitable credit-card business on the block to focus on its retail business, which sells everything from TVs to treadmills to lingerie.

It's a dramatic move that Sears hopes will generate as much as $7 billion, just about what the stock market values Sears' entire franchise at today.

But retail experts and former Sears executives doubt whether Sears' retail business can stand on its own. Its market share is shrinking at a time when rivals such as Wal-Mart Stores Inc., Target Corp. and Kohl's Corp. are growing at a rapid clip. And the credit unit regularly contributes more than 60 percent of the company's annual profit, providing an important cyclical counterbalance to its retail side.

Skeptics also point out that there's no evidence yet that Lacy's re-engineering of stores is getting more shoppers in the door or convincing them to spend more. On the contrary, sales at its 870 department stores have declined for the past 18 months, sometimes by double digits. They also say they haven't heard Lacy articulate a cohesive retail strategy that will reverse that trend.

To some Sears' veterans, selling the credit-card business…