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’80s, consumers did about 10 percent of their spending on goods in department stores, excluding autos, gas, and restaurants, according to Johnson. The estimate for 2016 is 1.7 percent.

That’s quite a turnabout for Sears, which rose from being a watch merchant in the late 1800s to America’s powerhouse retailer by the middle of the 20th century. In the 1980s it expanded its quest to be all things to all people, buying Coldwell Banker and Dean Witter Reynolds and introducing the Discover credit card. But the ’90s were a time of upheaval, with Sears pulling back from financial services and pushing hard to compete in clothing. To that end, it purchased Lands’ End in 2002 for $1.9 billion.

It was in that period that Sears began to move away from its blue-collar base, says Candace Corlett, president of consulting firm WSL Strategic Retail. “They wanted a better customer,” she says. “Frequently, when retail goes off the rails, it has to do with not liking the shopper you have.”

Emblematic of that effort, she says, was its 1990s Circle of Beauty brand of higher- end cosmetics that “were about three steps above the Sears shopper.” In the meantime, “the competitive mix was capturing the shopper that Sears didn’t want anymore.”

Sears Holdings neglected to spend on its stores, which still account for the overwhelming portion of sales for merchants even in the internet age. Chief executives and

other senior managers cycled quickly through the company, with Lampert himself becoming chief executive officer in 2013—in addition to his roles as chairman, lender, and largest shareholder. “The presumption when he bought it was that he was buying it for the real estate,” Corlett says. “I don’t think anyone but Eddie Lampert thought he was going to be a successful merchant.”

Evercore’s Mcginley says he remembers paging through a 2005 presentation where the company laid out its plans for cost- cutting and savings through the merger, including dramatic declines in store upkeep and advertising. “The stores degraded at a pretty fast pace,” he says. “It exacerbated the broader issues Sears and Kmart had with relevance right out of the gate.” At the same time, companies such as Target and Home Depot were expanding, opening stores away from malls in locations that were often more convenient to shoppers.

Sears tried to adapt in other ways. It experimented with various store formats, including a failed program to convert hundreds of Kmart outlets to a one- stop format called Sears Essentials. The company has invested heavily in its digital operations, offering often innovative features such as online ordering for drivethrough pickup. It’s sublet space in some of its stores to other retailers, including retailer with smaller and fewer stores. Sears Holdings had 1,672 stores on Jan. 30, vs. almost 3,500 at the time of the merger.

“Leaner, meaner, but with no reason to walk through the door,” Corlett says. “They don’t have any reason for being anymore. They’re totally redundant,” and others do the work better.

Still, Johnson thinks Sears can survive as a smaller chain focused on appliances—long a strength—despite the heightened competition from online sellers and brick-and-mortar chains such as Best Buy, Home Depot, and Lowe’s. “There’s a ‘there’ there,” says Johnson. “But it’s not going to be easy to get to.” �Lauren

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rival that of the U.S. after the new venues open, predicts industry consultant Aecom, growing from 120 million visitors last year to 220 million annually by 2020. “Mainland Chinese consumers have upgraded a lot in their behavior in the last 10 years,” says Jennifer So, a tourism analyst at China Securities International. “They want experiences, not just shopping. That’s why so many theme park operators see opportunities there.”

Next year, Dreamworks Animation plans to open its $2.4 billion Dreamcenter in Shanghai, and Haichang Ocean Park Holdings will unveil China’s biggest marine park. Six Flags Entertainment is due to open a park in China, its first outside North America, in 2019. “In the end, the successful ones will be those who know how to operate theme parks, not just develop them,” So says.

Disney and Six Flags, which have long run theme parks in the U.S., have an edge when it comes to experience. Chinese operators counter that they have a superior understanding of local conditions and offer better value for the money. They also may enjoy a political advantage. At China’s annual political meetings this year, Li Xiusong, Anhui province’s representative to the Chinese People’s Political Consultative Conference, said China shouldn’t allow too many Disney parks because doing so would make children indifferent to Chinese culture. He recommended that parks and attractions be based on Chinese literary classics.

One of the country’s most successful operators is Songcheng Performance Development, whose seven theme parks feature live theatrical shows incorporating indigenous culture. It climbed to No. 10 in Aecom’s ranking of top theme park groups worldwide last year, with 22 million visitors, a 53 percent jump from a year earlier.

“The key for theme park success today is brand popularity,” says John Gerner, an industry consultant. “That brand might be unique aspects of the local area and its history, but is increasingly a well-known intellectual property.” Chinese developers should license popular characters or develop some of their own, he says.

Some are doing that. Haichang Ocean Park has used characters from the hit Chinese film The Mermaid to promote its Shanghai Haichang Polar Ocean Park. Still, the pull of popular Western entertainment is difficult to ignore. At opening, performers were dressed as Snow White and Captain America— both Disney characters—and some stuffed animals for sale resembled Dreamworks’ Kung Fu Panda.

Disney said on May 30 that it’s prepared to address any infringement of its intellectual-property rights. On May 31, Wanda said Disney characters appeared in some stores in Wanda’s retail mall that’s part of the Wanda City complex, but not inside the ticketed theme park area. “The non-wanda characters were operated by individual stores within Wanda Mall,” Wanda said in a statement in response to Bloomberg queries. “They do not represent Wanda.”

Since it could take decades for Chinese companies to develop fresh characters to lure parkgoers, says analyst So, local operators could benefit more in the near term by competing on value. “A park like Haichang is not expensive, and people can visit it often,” she says. “But Disneyland is expensive and would be something people go to only once every few years.”

Shanghai Disney will boost the broader amusement park industry, much as Hollywood films spurred movie-watching among Chinese, says Michel Brekelmans, co-head of L.E.K. Consulting’s China practice. Now, China’s box office is poised to overtake North America’s. “I actually think Disneyland will help the local players strengthen the theme park culture in China,” Brekelmans says. “Because of its strong brand, people who might not otherwise go to theme parks will go and be exposed to the concept.” �Rachel Chang, with Emma Dong

The bottom line As more theme parks open in China, annual attendance could reach 220 million by 2020, up from 120 million last year.