Popular retailer Sears has grown from 3,500 locations to just 15 following mass closures.
Founded in 1886, the company was once the largest retailer in the world – but has now barely survived bankruptcy.
Sears initially started as a mail order company.
The RW Sears Watch Company, founded by Richard W. Sears, was based in Minnesota and offered jewelry and watches for sale.
According to Insider, Sears began to supplement its income.
After moving the company to Chicago, Sears hired Alvah C. Roebuck as a watch repairman. But in 1889, Sears sold the watch business.
Then, in 1893, Sears formed another mail order company with Roebuck called Sears, Roebuck and Company.
Two years later, Sears began planning catalogs that would later help the company soar.
The clothing manufacturer Julius Rosenwald bought the company and thus stimulated its growth.
Catalogs were sent to people who lived in rural areas and did not have access to stores.
The pages were filled with affordable clothing options available for purchase.
Additionally, in many cases, customers had the option to receive their items and then pay for them after they had arrived and been tried on.
Early 20th century
Sears was the first major retailer in the United States to sell its shares in an initial public offering (IPO) in 1906.
In the same year, the Sears catalog factory and the goods tower opened.
In 1909, Rosenwald became president of the company.
After World War I, Sears encountered its first major financial hurdle and was on the verge of bankruptcy.
Rosenwald used $21 million of his own wealth to avoid having to file for bankruptcy.
By 1922 the company was able to regain its financial stability.
Rosenwald then resigned as president in 1924.
In 1925, the first Sears, Roebuck and Company store opened its doors in Chicago under the leadership of general manager General Robert E. Wood.
Seven more stores were opened in the same year.
Wood became president of the company in 1928 and remained in various management positions until 1954.
By 1931, store purchases exceeded catalog orders.
Also in 1931, Sears founded Allstate Insurance Company in response to the rise of automobiles.
$1 billion mark
Sears managed to survive during the Great Depression.
But then business started to boom again.
In 1945, the company earned $1 billion – which would be equivalent to $16 billion today.
The catalogs continued to be very popular – as were the brick-and-mortar stores.
Sears was one of the first stores to offer clothing for men and women in addition to appliances and other household goods.
The company also experienced change as more suburban customers began shopping at its stores.
While Sears began selling automobiles in 1909, the company experienced another business shift in 1951 with the mail order business.
The vehicle was named after the company’s insurance brand, Allstate.
The company broke ground on the construction of the Sears Tower in Chicago in 1969.
When it was completed in 1973, it was the tallest building in the world – and it would hold that title for more than 20 years.
The building was 110 stories tall and cost $100 million to build and develop.
The tower housed office space for Sears’ main merchandising group and also served as corporate headquarters.
In the mid-20th century, Sears employed about 350,000 people – many of whom earned commissions on sales of certain products.
But then, in the 1980s, employees were told they would no longer receive sales commissions.
The company also began changing the floors of its showrooms.
Store managers were no longer able to adapt their inventory to the needs of their customers.
Instead, Sears became more uniform and provided stores with the same products.
Late 20th century
The end of the 20th century brought more new ventures for the company – including financial services.
In 1986, Sears launched the Discover Card. This was done by Dean Witter Financial Services Group, a subsidiary of Sears.
The company reported that the first purchase using a Discover Card occurred on September 17, 1985, when an employee visited a Sears store in Atlanta, Georgia.
But in 1990, Sears was overtaken by Walmart as the country’s largest retailer.
According to CNBC, Walmart reported sales of $32.6 billion this year, slightly more than Sears at $31.9 billion.
Sears discontinued its catalogs in 1993 and focused exclusively on in-store sales.
Then, in 1995, Sears formed its subsidiary Allstate Corporation, which was spun off from its insurance company.
Sears also struggled to attract more customers by offering auto and electronics repair services in addition to its existing inventory of clothing, appliances, household goods and more.
THE 21ST CENTURY
In the early 2000s, Sears made several sweeping changes.
The company bought clothing retailer Lands’ End for $2 billion in 2002.
In 2003, Sears sold the credit card business it had built to Citigroup.
But the credit card business accounted for 60 percent of Sears’ profits at the time, surpassing retail.
In 2005, Sears merged with Kmart—another company that had become the second-largest retailer, sandwiched between Walmart at number one and Sears at number three.
Kmart bought Sears for $11 billion.
Both companies then fell under Sears Holdings Corporation. The chairman was Eddie Lampert, a hedge fund manager.
Lampert was named CEO of the company in 2013 when it experienced further financial difficulties.
In 2015, Sears suffered significantly as sales fell to $25.1 billion from $36.2 billion in 2013.
In response, Lampert ordered businesses that were not performing well to close.
For comparison, Sears operated more than 3,500 Sears and Kmart stores in 2010.
Since then, more than 3,000 of them have been closed.
Filing for bankruptcy
Sears filed for Chapter 11 bankruptcy in 2018, when fewer than 700 stores remained in operation and 68,000 employees were employed.
Afterwards, Lampert resigned as CEO but remained chairman to support the bankruptcy case.
He then bought the company out of bankruptcy for $5 billion.
The move saved about 45,000 jobs and kept about 425 Sears and Kmart stores open.
But then in 2019, Sears filed a lawsuit against Lampert and several others, claiming they stole billions from the company.
“In total, Lampert caused more than $2 billion in assets to be transferred to himself and Sears’ other shareholders and out of the reach of Sears’ creditors,” the lawsuit says, according to Insider.
But Lampert’s ESL Investments issued a statement at the time saying the allegations were “misleading or simply completely false.”
The lawsuit was resolved in 2022 when a $175 million settlement agreement was reached.
This deal allowed Sears to emerge from bankruptcy, but the number of operating stores has continued to decline.
Between Sears and Kmart, fewer than 20 stores remain in 2023.