WhereIsAtlas · Retail

What Happened to Sears?

From a mail-order catalog that built middle-class America to a few dozen stores sold off to a hedge fund - the century-long collapse of the department-store giant.

Sears taught America to buy by catalog, but it mistook its buildings for its business - and a hedge-fund owner who sold the real estate could not save a retailer that had stopped being essential.

The icon that taught America to buy

For much of the twentieth century Sears was not a store so much as a national institution. For a hundred years it did what Walmart, Amazon and the big-box era would later do - it made more goods available, more cheaply, to more ordinary households than they had ever been before. It shipped chairs, guns, sewing machines and even whole houses to farms and small towns through the mail, then filled suburban malls with the same merchandise under one roof.

Then it stopped being essential. The discount era, the internet and a hedge-fund owner who valued its buildings more than its customers cut the giant down to a brand on a handful of stores. This is how the retailer that built middle-class America lost the century.

The Wish Book

Richard Sears started selling watches by mail in 1886, and the business exploded once he was joined by Alvah Roebuck in 1893. The Sears, Roebuck catalog - the "Wish Book" - became a window to the wider world for rural families, offering bicycles, pianos, farm implements, medicine and, for a stretch, entire kit houses delivered by rail.

The genius was not the merchandise but the machine: a national mail-order network, printed prices, and a promise that ordering by mail was trustworthy. Sears, in effect, invented the national catalog retailer before department stores or chains dominated the landscape.

The suburban empire

In 1925 Sears opened its first physical store, and the company rode the car-and-highway boom to every growing suburb. By the 1960s and 70s Sears was the largest retailer in the world, and in 1973 it opened the 108-story Sears Tower in Chicago - briefly the tallest building on Earth. It anchored malls, sold appliances under its Kenmore and Craftsman brands, and owned Allstate insurance, Dean Witter and Discover as side businesses.

This was the peak: a vertically integrated retail-and-finance empire with its own brands and its own skyscraper.

The discount era arrives

The seeds of the end were structural. Walmart's discount model, built on enormous scale and rock-bottom cost, passed Sears as the US retail leader by 1989. Meanwhile the catalog that founded the company faded against constant price competition and later against Amazon, which could do what the Wish Book did with near-infinite inventory and no stores at all.

Sears was slow to respond. It kept a sprawling, expensive store network and departments it could not win, and by the 1990s and 2000s it was shrinking and selling off its prized subsidiaries just to keep the lights on.

Selling the building instead of the business

In 2005 Sears merged with Kmart into Sears Holdings, run by hedge-fund manager Eddie Lampert. Lampert's playbook was financial, not retail: rather than reinvest in stores, he paid down debt by selling and leasing back Sears real estate - effectively treating a retail company as a property portfolio to be monetized.

That strategy bought time but not a future. Without investment, stores decayed, customers moved on, and the store network shrank year after year.

Where is Sears now?

Sears filed for Chapter 11 on 15 October 2018. Lampert won the bankruptcy auction and folded the business into Transformco, and the chain has contracted to a small remnant of stores. Kmart, its merger partner, is a shadow too.

The brand survives - and the story still fascinates. The lesson is blunt: a company that taught consumers to buy by mail forgot that its real asset was the relationship with customers, not the real estate. When it began monetizing its buildings instead of improving its stores, the end was only a matter of time.

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