Sears^® Closing Stores

If you shopped in America during the 20th century, chances are you visited a Sears^® store. Famously known as "Where America Shops," Sears was the quintessential department store, offering everything from appliances to apparel. Yet today, Sears is a shadow of its former self, with only a handful of locations remaining. So, how did this retail powerhouse crumble?

A Golden Age of Retail

Founded in 1892 as a mail-order catalog company, Sears, Roebuck & Co. quickly became synonymous with American retail. Its innovative catalog business revolutionized shopping for rural Americans, offering everything from tools to prefabricated homes. By the mid-20th century, Sears expanded into physical stores, becoming a retail behemoth.

At its peak, Sears operated nearly 3,500 stores, including 2,350 full-line department stores and 1,100 specialty shops, and had a portfolio of iconic brands like Kenmore^®, Craftsman^®, and DieHard^®. Its sprawling locations became destinations for families, boasting everything from home goods to automotive services.

Sears' dominance seemed unshakable. However, as consumer habits evolved and competitors like Walmart^® and Amazon^® grew, cracks in Sears' foundation began to show.

The First Signs of Trouble

Sears began to falter in the late 20th century when Walmart overtook it as the top U.S. retailer. Walmart's low-cost, high-efficiency model attracted budget-conscious shoppers, while Sears struggled to modernize its operations.

The emergence of e-commerce in the late 1990s and early 2000s further destabilized Sears. Amazon's rise introduced a new level of convenience that Sears couldn't match. While competitors invested heavily in digital transformation, Sears lagged behind, relying on its aging infrastructure and outdated strategies.

The Lampert Era

In 2005, Eddie Lampert, then chairman of Kmart^® Holding, acquired Sears in an $11 billion deal aimed at consolidating resources to compete with Walmart and Amazon. The combined company, Transformco^®, generated $55 billion in annual revenue—just one-fifth of Walmart's fiscal 2004 total of $256 billion.

However, Lampert's approach to management drew criticism. He focused on cost-cutting and asset sales instead of innovation. Sears sold its Craftsman brand to Stanley Black & Decker^® for $775 million in 2017, and Lampert later sold DieHard to Advance Auto^® for $200 million in 2019.

The Death Spiral

By the 2010s, Sears was on a rapid downward spiral. Between 2011 and 2018, Sears closed more than 1,000 locations. In October 2018, it filed for Chapter 11 bankruptcy, citing a 53.8% revenue decline over the prior five years.

The bankruptcy process was extensive, involving over 10,000 court filings and lasting four years. Lampert repurchased Sears' assets for $5.2 billion in 2019, but store closures continued. By early 2024, only 12 Sears locations remained nationwide, with one in Puerto Rico.

Why Did Sears Fail?

Sears' decline can be attributed to several key factors:

• Asset Stripping: Lampert's strategy of selling off valuable assets provided short-term relief but left Sears with fewer resources to compete effectively.
• Increased Competition: Sears faced fierce competition from Walmart, Amazon, and other retailers that offered lower prices, greater convenience, and superior customer experiences.

A Legacy in Decline

In its heyday, Sears was more than a store — it was a cultural institution. Its catalog business brought modernity to rural America, and its stores were community hubs.

However, by 2024, Sears' footprint had shrunk to just a dozen locations, excluding smaller-format Hometown Stores. The brand has become a relic of a bygone era, remembered fondly but rendered obsolete by shifting consumer habits.

Lessons From Sears' Demise

The fall of Sears offers valuable insights for businesses:

• Adaptation Is Crucial: Companies must embrace innovation and adapt to changing markets to survive.
• Customer Focus Matters: Cost-cutting at the expense of customer experience can alienate loyal shoppers.
• Strategic Vision Is Essential: Leadership that prioritizes short-term gains over long-term sustainability risks undermining the business.

The Future of Sears

While the remaining Sears stores continue to operate under Transformco, their future remains uncertain. Analysts predict that even these locations will eventually close, marking the end of an era.

Sears' story isn't just about the rise and fall of a company — it's a reflection of the broader transformations in the retail industry. From the dominance of big-box stores to the e-commerce revolution, Sears' fate underscores the importance of innovation, adaptability, and vision.

Final Thoughts

Sears was once a beacon of American retail, pioneering innovations that defined shopping for generations. Its decline serves as a reminder that even the most iconic brands are vulnerable to change. As the retail landscape continues to evolve, the lessons from Sears' fall will remain relevant for years to come.

References: What Happened to Sears? | Last Sears in NY Area Shutting Down