Bankruptcy a sad footnote for Sears, the Amazon of its day
For at least a century, Sears was the go-to retailer for the American shopper. Whether it was Craftsman tools, Diehard batteries, Kenmore washers and dryers or Kings Road slacks, Sears provided. The goods weren’t flashy, but they were affordable and made to last.
The bulky Sears catalog, which debuted in the 1890s, was revered by shoppers, who couldn’t wait for it to show up in the mail. In fact, I received a message on my LinkedIn page over the weekend from a teacher in California who had read about Sears’ bankruptcy filing in our North American edition.
“I used the thick Sears catalog to learn English,” she wrote. “When I was a child in Vietnam during the war, somebody gave me a Sears catalog because I love to read — I didn’t know the catalog’s purpose was for ordering merchandise. I used it to learn English. It was very effective with pictures. Oh, how I love that thick Sears catalog.”
But with Sears’ bankruptcy filing on Oct 15, that catalog is a relic, as the realities of the internet age have set in. Sears can’t get enough people in its stores. Consumers have many other options, not only from e-commerce giants such as Amazon and eBay but also physical stores like Walmart and Home Depot. Eighty percent of Sears stores are within a 15-minute drive of competitors Home Depot, Lowe’s and Best Buy, and 71 percent of Kmart stores — owned by Sears’ parent company — are located within 15 minutes of a Walmart supercenter.
“Once you lose your customers, once they’re not in the store anymore, it’s the end of the game,” James Schrager, a professor at the University of Chicago’s Booth School of Business, told Chicago Tribune.
US President Donald Trump said: “For somebody of my generation, Sears Roebuck was a big deal. … Sears has been dying for many years, it has been obviously improperly run for many years, and it’s a shame.”
Sears listed $6.9 billion in assets and $11.3 billion in liabilities in documents filed in US Bankruptcy Court in New York. Last year, Sears sold its iconic Craftsman tool brand to Stanley Black & Decker for $900 million.
The filing follows a decade of falling revenue, store closures and deals by hedge fund billionaire Eddie Lampert in an attempt to revive the company he acquired in 2005 for $11 billion. Lampert said Sears would close 142 more of its 700 stores near year-end, not counting the 46 it already plans to shutter. Now based in Hoffman Estates, Illinois, Sears, which has not been in profit since 2011, set up $300 million in debtor-in-possession financing to operate and pay workers during its restructuring attempt.
The bankruptcy filing came more than 130 years after Richard Sears moved his business to Chicago, where the former watch company would become a world-class retailer.
In 1973, Sears moved its headquarters to the Sears Tower, Chicago’s most famous building, which for more than two decades was the world’s tallest. It was sold in the mid1990s and was renamed Willis Tower in 2009.
Lampert — who with his hedge fund ESL Investments has lent Sears $1.6 billion over the past two years — had insisted the company was serious about a turnaround.
“Sears could have maintained pre-eminence and, in the digital era, elbowed out Amazon and other retailers. Some companies do preserve and build on success through reinvention. Look at McDonald’s,” Chicago Tribune said in an editorial.
Amazon, if you’re listening, Sears has plenty of brick-andmortar buildings in good locations that could serve as distribution centers.
formerly the Sears Tower, seen in 2009.