It’s the end of an era. After almost 130 years being part of the daily life of Americans, the last establishment of the Sears department store in Illinois, his home state, will close its doors forever on November 14. Sears thus surrenders to the reign of the giants of electronic commerce, low cost chains and new consumer habits. Although it still has some fifty stores open throughout the country -between Sears and Kmart-, the company was close to 1,000 stores in 2017.
Victim of the so-called “retail apocalypse” that arose from the economic crisis of 2007 and very worn after the rise of low-cost chains such as WalMart and the subsequent arrival of Amazon, . At that time, the company calculated a value of its assets of 6,900 million dollars (5,965 million euros), compared to liabilities of 11,300 million dollars (9,769 million euros).
A tragic end for the former leader of the retail market and symbol of American capitalism.
meteoric rise
Founded in 1893 by Richard W. Sears, in its beginnings it was a company dedicated to catalog sales. Soon after, it was acquired by garment magnate Julius Rosenwald and specialized in selling low-cost products to underserved rural areas. This, combined with proper product advertising, consumer education, and corporate branding, greatly boosted its popularity.
In 1906, Sears became the first major American retailer to go public. Goldman Sachs was in charge of the process and the share price was close to $100, according to CNBC. That same year, the future department store opened its catalog factory and the Sears Tower Merchandise Building in Chicago.
Rosenwald saved Sears from the brink of bankruptcy, a side effect of the economic crisis suffered by farmers after World War I. Shortly after he left the management of the company.
In 1926, under the direction of Robert E. Wood, Sears opened its first store in Chicago. This was followed by seven more and, in just five years, physical sales exceeded those made by mail. Around this time, the popularity of the automobile led Sears to found Allstates, its own insurance company.
In 1945, Sears billed 1,000 million dollars a year, about 13,000 million dollars today. It was one of the first to cater to both men and women, as well as offering a wide range of products ranging from household items to home appliances. It also expanded into suburban centers, which became its main market.
Sears sales peaked in the period from the end of World War II to the 1970s. During this period, the department store continued to expand across the country and made the leap to Mexico and Canada. . In 1973, the new Sears Tower was inaugurated, with 110 floors and an investment of 100 million dollars, it held the title of tallest building in the world for more than two decades.
fall from grace
From then on, things began to go wrong for Sears. The entry on the scene of low-cost retailers such as Target, Kmart and Walmart, and a prosperous upper-middle class that opted for more luxurious department stores, led to a significant drain on customers.
In 1991, it lost the throne as the nation’s largest retailer to Walmart. In 1993, Sears dispensed with the catalogs that had propelled it to the top and entered the insurance and financial services industry. Two years later, Sears closed its largest subsidiary, Allstate Corporation.
With the advent of Amazon and the rise of e-commerce, sales began to fall. That’s when the downsizing and store closings began. In 2016, Sears’ chairman, hedge fund manager Eddie Lampert, was considered America’s most hated CEO, according to the views of his employees posted on Glassdoor and reported by 24/7 Wall St.
Shortly after resigning as CEO, Lampert bought the company for $5 billion. In response, Sears took legal action against him and former board members, alleging the theft of billions of dollars, according to Business Insider. As Sears prepares to close his last store, the lawsuit remains unresolved.
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