It’s the end of an era. After almost 130 years being part of the daily life of the Americans, the last establishment of the Sears department store, located in his home state, Illionis, closes its doors forever on November 14. Sears thus surrenders to the reign of the e-commerce giants, low-cost chains and new consumer habits.
Victim of the so-called “retail apocalypse” arising 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, Sears Holding declared bankruptcy in 2018 . 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 retail market leader and symbol of American capitalism . Here is a brief review of the history of these department stores.
Founded in 1893 by Richard W. Sears, it was initially a catalog sales company. Soon after, it was acquired by garment mogul Julius Rosenwald and specialized in selling low-cost products in 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, future department stores opened their catalog factory and the Sears Merchandise Building in Chicago.
Rosenwald saved Sears from the brink of bankruptcy, a collateral effect of the economic crisis that farmers suffered after World War I. Shortly after, he left the management of the company.
In 1926, and under the leadership of Robert E. Wood, Sears opened its first store in Chicago. This was followed by seven more, and in just five years, physical sales surpassed those made by mail . Around this time, the popularity of the automobile led Sears to found Allstates, its own insurance company.
In 1945, Sears had a turnover of $ 1 billion a year , about $ 13 billion 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 appliances. It also carried out an expansion into the suburban centers, which became its main market.
Sears sales reached their highest level in the period from the end of World War II to the 1970s . During that period, department stores continued to expand throughout 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 started to go wrong for Sears. The entry into 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 customer flight .
In 1991, it lost the throne of the nation’s largest retailer to the detriment of Walmart . In 1993, Sears dispensed with the catalogs that had lifted it to the top and entered the insurance and financial services industry. Two years later, Sears closed its largest subsidiary, Allstate Corporation.
With the arrival of Amazon and the rise of e-commerce, sales began to fall. That’s when the staff cuts and store closures began . In 2016, Sears chairman, hedge fund manager Eddie Lampert, was considered America’s most hated CEO, according to employee views posted on Glassdoor and collected 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 members of the board of directors, alleging the theft of billions of dollars, according to Business Insider. As Sears prepares to close its latest store, the lawsuit remains unresolved.