An excerpt from Sears' 10K (annual report) filing with the SEC:

The Company has divided its mission critical merchandise vendors into three tiers:

o The first tier is the Company's 40 largest merchandise vendors, which comprise approximately 50% of its merchandise sales;

o The second tier is the 306 next largest vendors, which comprise approximately 30% of its merchandise sales; and,

o The third tier is the 639 next largest vendors, which comprise approximately 10% of its merchandise sales.

The Company has communicated to each mission critical vendor that if it is not Year 2000 compliant by July 1, 1999, the Company may find an alternative vendor. The Company categorizes its vendors on a scale of green (on target to be compliant by July 1), yellow (on target to be compliant by July 1 but minor concerns about progress) and red (not on target to be compliant by July 1). The Company has performed site visits of all but one (which it anticipates completing by April 1, 1999) of its first tier vendors. The Company is performing telephone conferences with second tier vendors. The Company has completed telephone conferences with 90% of second tier vendors with a red rating and anticipates completing telephone conferences with all others by June 1. In addition, the Company is tracking responses to the Year 2000 questionnaire distributed to all mission critical vendors in January 1998, reviewing follow-up progress reports, reviewing vendors' filings with the Securities and Exchange Commission and conducting electronic data interchange testing for all mission critical vendors. As of February 28, 1999, the Company has assigned red ratings to one first tier vendor (less than 1% of merchandise sales), 55 second tier vendors (approximately 5% of merchandise sales) and 256 third tier vendors (approximately 3% of merchandise sales).

-- Jerry BB (skeptic76@erols.com), March 25, 1999

Answers

"The Company has communicated to each mission critical vendor that if it is not Year 2000 compliant by July 1, 1999, the Company may find an alternative vendor."

This is exactly the reason why I think, if there is panic, it could start at Wall Street before spilling over to the general public.

-- Kevin (mixesmusic@worldnet.att.net), March 25, 1999.