How the World's Largest Retailer Crashed and Burned

Brand Spotlight: Sears

Sears was the great American retail story.

If you grew up visiting suburban shopping malls, you remember Sears. You could buy literally anything at Sears, including houses!

Sears saw the worst and best times of our country. They made it through the Great Depression and two World Wars. They served America as it grew into an industrial powerhouse.

At the retailer’s peak, they had 3,500 locations!

This week, Sears emerged from bankruptcy, left with less than two dozen stores…

What went wrong??

The Growth Story

Richard Sears and Alvah Roebuck launched Sears in 1892. The pair created a mail order catalog that sold anything you'd need for your home. The catalog became a huge hit in rural areas that had little access to these products.

By the turn of the century, sales were soaring. In 1905, the company did $38M in sales, over $1B in 2022 dollars! In 1906, Sears went public, the first major retailer to do so, raising $40M to fuel its expansion.

In 1925, Sears opened its first retail store in Chicago. In the new era of automobiles, the store was accessible for suburban and rural customers.

The retail stores boomed, growing to 300 stores by 1929. In 1931, retail store sales surpassed catalog sales.

Sears thrived, even during the Great Depression. By the mid-1950’s, Sears department stores grew to over 700!

The Sears Tower

In the late 1960’s, Sears had cemented itself as the world’s largest retailer. The company had 350,000 employees and needed to build a central office, but not any office…

The Sears Tower debuted in 1974 in Chicago as the tallest building in the world! The building towered over Chicago, peaking at 1,454 feet and 108 stories!

The Decline

After completing their monumental head office, Sears’ sales started declining. Sears was once the epitome of innovation of American retail. Now, the brand was losing its way, as emerging discount retailers were taking market share.

Sears became synonymous with the shopping mall. Meanwhile, emerging players, like Kmart and Walmart were building in more convenient locations. These new "big box" retailers were able to better service the suburban consumer.

Not only did Sears not innovate with their stores, they lost focus. With the goal of diversifying, they bought a financial company and an insurance group. They also created the Discover Card to offer credit to consumers!

By 1990, Walmart had surpassed Sears in sales.

Only 18 years after completing the Sears Tower, the struggling company sold its world famous building.

The Eddie Lampert Era (and more decline)

In 2002, hedge fund whiz kid Eddie Lampert bought Kmart from bankruptcy. In 2004, he masterminded a deal to merge Kmart with Sears for $11B. The new Sears Holding Corporation was born.

Wall Street praised the deal, but this became the start of a long, painful decline.

Lampert restructured management with disastrous results. Employees were unhappy. Lampert rarely appeared at the company in person, managing the company remotely from his Florida mansion. Sears was in disrepair and being overtaken by a new emerging retail giant - Amazon.

Lampert then began to sell off profitable business lines and assets.

• In 2014, Land’s End was spun off for $500M.

• In 2015, the Sears and Kmart real estate properties were spun off into a REIT. 

• In 2017, Craftsman Tools was sold for $900M.

• In 2017, the DieHard battery brand was sold for $200M.

Sales fell from $43 billion in 2010 to less than $17 billion in 2017.

In 2011 the tech giant surpassed Sears, then lapped it in 2013. In 2016, Amazon made $136 billion in sales to Sears' $22 billion.

In 2010, the company operated more than 3,500 Kmart and Sears stores. More than 3,000 locations have since closed.

Company sales plummeted and the company declared bankruptcy in 2018.

The saga of Sears has been long and painful, resulting in tragic failure.

Over the years, Sears had created an iconic brand and built incredible companies. The company is now a hollowed out shell of its former self.

Today, I’m pouring one out for Sears.

To all of you, have a great weekend!