page_title: Dean Witter Reynolds
section_title: The Dean Witter Reynolds merger and the Sears acquisition (1978-1993)
hierarchical_section_title: Dean Witter Reynolds / History / The Dean Witter Reynolds merger and the Sears acquisition (1978-1993)
caption_attribution_description: English: Discover Novus acceptance mark.
context_page_description: Dean Witter Reynolds was an American stock brokerage and securities firm catering to retail clients. Prior to the company's acquisition, it was among the largest retail firms in the securities industry with over 9,000 account executives and was among the largest members of the New York Stock Exchange. The company served over 3.2 million clients primarily in the U.S. Dean Witter provided debt and equity underwriting and brokerage as mutual funds and other saving and investment products for individual investors. The company's asset management arm, Dean Witter InterCapital, with total assets of $90.0 billion prior to the acquisition, was one of the largest asset management operations in the U.S.
  Dean Witter Reynolds was founded in 1978 as the merger of Dean Witter & Co. and Reynolds Securities, which was then the biggest merger in the history of Wall Street. The company was acquired by Sears in 1981, and was renamed "Dean Witter, Discover & Co." in 1993 when Sears spun off the company. The company also owned Discover Card.
  In 1997, Dean Witter, Discover & Co. merged with investment banking house Morgan Stanley to form "Morgan Stanley Dean Witter & Discover Co.".
context_section_description: In 1978 Dean Witter and Reynolds merged to form Dean Witter Reynolds Organization Inc. (DWRO) in what was then the largest securities-industry merger in U.S. history.  The resultant company, Dean Witter Reynolds, was the fifth-largest broker in the U.S.  One year later Dean Witter Reynolds became the first securities firm to have offices in all 50 U.S. states and Washington, D.C.  After completion of the merger, Dean Witter Reynolds generated revenue of more than $520 million.
  In 1981, Dean Witter Reynolds was acquired by Sears, Roebuck and Company in a $600 million transaction.  Sears' core retail business was facing several challenges, and the company decided to diversify into new businesses, including financial services.  Sears, which was already in the financial services business through its ownership of the Allstate Insurance Company announced a major acquisition initiative in financial services.  In addition to the acquisition of Dean Witter, Sears also acquired Coldwell Banker, the real estate brokerage company in 1981.  Sears intended for Dean Witter to form the foundation for a larger Sears Financial Services Network that would be available to customers through the company's retail stores.
  Sears named Philip J. Purcell, a strategic planner at the Sears Chicago headquarters and former McKinsey & Co. consultant, to head Dean Witter.  Purcell moved to New York to run the operation from Dean Witter's office.  At the time of the Sears acquisition, Dean Witter Reynolds had a retail broker force of over 4,500 account executives in over 300 locations with over 11,500 employees in total.  For the year ended 1980, Dean Witter Reynolds generated over $700 million of revenue.
  Under Sears ownership, in 1986, the firm launched the Discover Card, a new brand of credit card outside the well established Visa, MasterCard and American Express networks.  Unlike other attempts at creating a credit card to rival MasterCard and VISA, such as Citibank's Choice card, the Discover Card quickly gained a large national consumer base. It carried no annual fee, which was uncommon at the time, and offered a typically higher credit limit than similar cards.  Cardholders could earn a "Cashback Bonus," in which a percentage of the amount spent would be refunded to the account (originally 2%, now as high as 5%), depending on how much the card was used. Discover offered merchant fees significantly lower than those of other widely accepted credit cards. Eventually, Discover grew to become one of the largest credit card issuers in the U.S.
caption: Dean Witter, under Sears ownership, launched the Discover Card in 1986
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