During his press conference, Sears CEO Eddie Lampert mentioned a deadline of Wednesday at 4:00 to come up with a non refundable deposit of $120 million to postpone liquidation and keep negotiations alive to buy out creditors for approximately 4.4 billion dollars. This would save 425 Sears stores from shutting down on Monday and save about 50,000 jobs. At the time of our posting, there is no word if this deadline was met.
It’s ironic that as another Christmas season passes, Sears, the creator of “The Wish Book” is finally ending their 125 year history. At one point having a stock that peaked at just under $200 a share, the once retail giant represented by the Sears Tower(now called The Willis Tower, the world’s tallest building until 2014’s completion of the new World Trade Center) tumbled to under $4 a share last Fall.
It would be easy to blame internet giant Amazon for Sears’ demise, and while it is true that the online behemoth mirrors what Sears did in its heyday of catalog and retail stores, the fact is that Sears lost out to Walmart well before Amazon was the presence it is today. No, the fate of the Sears Roebuck Company was brought on internally, as old managers retired and new ideas failed.
Strangely, young Richard Sears (barely twenty at the time) in the mid 80’s (that’s 1880’s) was working as a rail station clerk in Minnesota trying to scrounge out a buck.
When one of his passengers complained of a batch of gold watches he couldn’t fit for travel, young Sears made him a low ball offer and hustled out a huge profit by hitting up his busy passenger base looking to stay on time during their travels. Thinking he should try selling more watches, he would eventually move to Chicago where he partnered up with a twenty-something year old watch maker named Alvah Roebuck.
The ambitious young upstarts marketed their watches in multipage mail-order catalogs. Sears and Roebuck was off and running.
Of course, as history showed us, the Sears Catalog would replace the general stores by offering anything you could think of- from a hunting rifle to a pot belly stove- and when rural America became mobile, Sears just put up brick and mortar retail stores that stuffed everything from the catalog into “departments.”
As the Sears brand became synonymous with hard goods, as well as a full line of clothing, innovative thinking helped the entrepreneurs realize that they could produce their own line of certain products. The Craftsman Tool division and Kenmore appliances were launched, along with their own clothing line. They didn’t limit their branding acumen to merchandise either. Sears entered the financial industry and established the Allstate Insurance Company.
As early as 1984, Sears partnered with IBM and CBS to form the innovative Prodigy service, a pre internet hookup more similar to cable, whose platform contained all the features (e-mail, games etc.) that today is the standard of web communication. The flaw of course is that the internet would soon replace a closed subscriber network.
Prodigy’s demise was barely felt, but the retail king had begun what would become a series of miscalculations and overreaches that would chip away at their empire.
Some former employees say that incentives and commissions on company brands were eliminated, and caused the sales staff to lose their customer service drive. Managers who used to be able to customize their departments by selecting what sold locally were handcuffed to adhere to stocking and displaying standardized selections that corporate heads thought would protect their product lines.
When those special nuances vanished, the big box warehouse-like Walmart Stores with their low bargains became the growing brand. As Walmart’s profits rose to almost half a billion dollars in 2004, Sear’s profits fell to a dismal $92 million that same year.
In 2013, a KMart executive weary of his company’s dwindling sales shepherded a buyout of Sears, streamlining their corporate employees and selling off assets, as well as initiating store closings.
But it was too little too late. The Sears name no longer stood for service, reliability and innovation, the cornerstone of their business model. And so the mighty giant is no more.
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