A Farewell to Sears

Everyone loves Sears.  It’s an American icon who once used the tagline “Where America shops.”  When is the last time you shopped at Sears?

*crickets*

Exactly.

At one time, Sears commanded a vast retail empire that included some 3500 stores and a dizzying array of subsidiaries.  Sears created Allstate Insurance and the Discover Card, and bought many other companies, including Coldwell Banker Real Estate, Dean Witter Securities, Budget Car and Truck Rental, Pinstripes Petites, Western Auto, National Tire and Battery (NTB), Lands’ End and more.  Sears sold just about anything one could imagine - even actual houses as ready-to-build mail-order kits.

Through its correspondence school, the Sears Extension Institute, employees could take courses on dozens of topics including electrical wiring, salesmanship, and refrigerator repair.  Sears had a testing lab to study defective products, and a research lab to develop better paints.  Sears owned Chicago radio station WLS (“World’s Largest Store”) and its headquarters, the Sears Tower (now renamed the Willis Tower,) stood for two decades as the tallest building in the world.  At times in history, Sears has been the largest retailer and the largest employer in America.

And in a few days, it will likely begin liquidation proceedings.

I’m a little nostalgic because I grew up around Sears. I was the Sears Generation, and I’ve followed the sad saga of Sears unraveling over the last two decades. My mom spent hours shopping for Toughskins school clothes there while I munched on the incredible Sears popcorn.  Our house, like most middle-class American homes of the 1970s, was full of Sears appliances, Sears paint and deep shag Sears carpet.  We had a Sears fence, a Sears air conditioner and Sears towels. As kids, we eagerly awaited the Sears Christmas catalog (“Wish Book”) with its stunning assortment of toys.  

I even worked at Sears while I was in college. I dreamed of punching my time card in the tool department, a vast wonderland of amazing and innovative items.  Instead they stuck me in the linen section, where I spent countless hours folding thousands of towels, in the most boring job I ever held.  The only benefit:  My wife appreciates that I’m still the best towel-folder in the west.

Sears had the elegance of a fine department store, with real ceilings and carpet on the floors, with prices people could afford, and practical items people needed.  Our store manager, Mr. Arnold, ran a tight ship, making rounds, checking that everything was spit-and-polished, and pointing out the freshly painted walls.  “You won’t find fresh paint at Walmart,” he said with obvious pride.

But even as an employee in the late 1980s I could see Sears was falling behind.  The stores looked boring:  beige landscapes stuffed with equally dull merchandise.  As credit cards proliferated, Sears refused to sign on with the major credit cards, accepting only the Sears card and its home-grown Discover.   In this era before debit cards, checks remained a major method of payment. Most other stores accepted checks by comparing names and account numbers against a database of known bad-check writers, but Sears used a complex and irrational system based on the check number and whether the customer had a major credit card. Any check under $100 received almost no scrutiny, while checks over $100 required approval from a manager, a pointless and time-consuming hassle.  Customers couldn’t understand why they could use a Visa or MasterCard to write a check, but not to pay for their purchases.  Nor could they understand why it took 10 minutes to pay by check at Sears, while it took 10 seconds at Target.  The mighty Sears catalog didn’t even have a central phone number for ordering; instead, you had to call your local Sears store, during business hours, to place an order.

In one particularly impressive gaffe, Sears sent out a coupon for 15% off any regularly-priced item.  At the same time, they held a weekend sale event in which everything in the store was on sale.  That’s right, you couldn’t buy a single item with that coupon.

Sears failed to keep up with competition from big-box discounters like Walmart, Home Depot and Lowe’s, who offered a bigger selection, lower prices and a more streamlined shopping experience. 

Sears would have been perfectly poised to soar as Internet shopping started to take off.  With a vast catalog infrastructure integrated with a huge network of retail stores, a well-loved brand, and a mind-boggling selection of merchandise, Sears might well have become the world’s premier online merchant.  That is, if they hadn’t shut down the whole catalog business just before the rise of the Internet.  The decline of malls and the rise of online shopping only heaped more pain on the struggling behemoth.

The end of Sears began in 2004, when Kmart acquired the company.  The once-mighty World’s Largest Store was degraded to a Blue Light Special, purchased by another has-been retailer you probably thought didn’t even exist any more.  When was the last time you saw a Kmart?  Kmart has only one store in the entire state of Texas. (It’s in McAllen, if you were curious.  For comparison, Walmart has 408, up from 380 when I wrote the first draft of this article.)

Hedge-fund billionaire Eddie Lampert engineered the takeover and appointed himself CEO, in a completely hands-off role in which his only interaction with the company is periodically yelling at managers by video conference from his 288-foot yacht.  Lampert has kept Sears (barely) alive with huge personal loans, massive store closures and layoffs, and by selling off virtually everything Sears owned. Sears has sold or spun off all its associated companies.  Sears sold the Craftsman brand and is looking for buyers for the Kenmore and Diehard brands.  The company even sold all the real estate that houses its stores, so now it’s paying rent on space it used to own, a huge new expense. Quite simply, Sears has almost nothing left to sell at this point. Sears has been (unofficially) liquidating itself for the last 7 years, a truly amazing duration that only a company of its once-vast size and scope could accomplish.  

In the last few years I’ve occasionally visited a Sears store, when I felt like having a surreal experience.  I could stroll through huge expanses of empty space, look through half-empty shelves and merchandise piled on the floor, never interrupted by an employee attempting to help me.

In March 2017, even Sears finally admitted the inevitable.  After years of insisting that everything was just fine, the company quietly filed a routine government report with the statement “our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern.”  Although company officials publicly continued to tout an imminent turnaround—Sears is going to displace Amazon any day now—it was obvious that after 7 years of straight losses, the end was at hand.  Which brings us to this week, when, according to media reports, Sears’ many creditors are pushing for a liquidation as the company scrambles to scrape up cash for its latest debt payment.

Sears won’t disappear entirely.  In the bankruptcy auction, someone will buy the rights to the name and operate an online store with it, hoping to attract nostalgic shoppers, just like its one-time archrival Montgomery Ward or the more recent Circuit City.  Stanley Black and Decker will still sell Craftsman tools, which are now showing up at Lowe’s and Ace Hardware.  New owners might pick up other strong brand names such as Kenmore and Diehard, and continue them at other stores.  But the Sears of our childhood will be gone forever - in fact, it already is.