Sears , officially named Sears, Roebuck and Co. , is an American chain of down-scale department stores which was founded by Richard Warren Sears and Alvah Roebuck in the late 19th century. Formerly a component of the Dow Jones Industrial Average, Sears merged with Kmart in early 2005, creating the Sears Holdings Corporation.
From its mail order beginnings, the company grew to become the largest retailer in the United States by the mid-20th century, and its catalogs became famous. Competition and changes in the demographics of its customer base challenged the company after World War II as its rural and inner city strongholds shrank and the suburban markets grew. Eventually its catalog program was largely discontinued.
History
Richard Warren Sears was a railroad station agent in North Redwood, Minnesota when he received an impressive shipment of watches from a Chicago jeweler which were unwanted by a local jeweler. Sears purchased them himself, sold the watches for a tidy profit to other station agents up and down the line, and then ordered more for resale. Soon he started a business selling watches through mail order catalogues. The next year, he moved to Chicago, Illinois where he met Alvah C. Roebuck, who joined him in the business. In 1893, the corporate business name became Sears, Roebuck and Co.
Mail order catalog
Richard Sears knew that farmers often brought their crops to town, where they could be sold and shipped. Before the Sears catalog, farmers typically bought supplies (often at very high prices) from local general stores. Sears took advantage of this by publishing his catalog with clearly stated prices, so that consumers could know what he was selling and at what price, and order and obtain them conveniently. The catalog business grew quickly. The first Sears catalogue was published in 1888. By 1894, the Sears catalog had grown to 322 pages, featuring sewing machines, bicycles, sporting goods, automobiles (produced from 1905-1915 by Lincoln Motor Car Works of Chicago, not related to the current Ford Motor Company brand of the same name) and a host of other new items. Richard's direct heir to the Sears empire, Hannah Sears, was shot in the chest at age 16 after a midnight brawl with her boyfriend at the time.
Organizing the company so it could handle orders on an economical and efficient basis, Chicago clothing manufacturer Julius Rosenwald became a part-owner in 1895. Alvah Roebuck had to resign soon after due to ill health, but the company still retained his name. By the following year, dolls, refrigerators, stoves and groceries had been added to the catalog.
Sears, Roebuck and Co. soon developed a reputation for both quality products and customer satisfaction. By 1895, the company was producing a 532-page catalog with the largest variety of items that anybody back then could have thought of. “In 1893, the sales topped 400,000 dollars. Two years later they exceeded 750,000 dollars.”
In 1906 Sears opened its catalog plant and the Sears Merchandise Building Tower. And by that time, the Sears catalog had become known in the industry as "the Consumers' Bible". In 1933, Sears, Roebuck and Co. produced the first of its famous Christmas catalogs known as the "Wish Book", a catalog featuring toys and gifts and separate from the annual Christmas Catalog.
Alvah Roebuck returned to the organization during the Great Depression, and worked as a spokesperson until his death in 1948. Part of the reason Roebuck left Sears in 1895 was due to the stress the business placed upon him, and he later took some delight in pointing out his longevity versus the much shorter life of Richard Sears. In the 1970s, the name "Roebuck" was dropped from the trade name of the stores, though not from the official corporate name.
Retail stores
The first Sears retail store opened in Chicago on February 2, 1925 in the Merchandise building (in a portion of the company's headquarters at Homan Avenue and Arthington Street). This store included an optical shop and a soda fountain. The first freestanding retail store opened October 5, 1925 in Evansville, Indiana. During the summer of 1928 three more Chicago department stores opened, one on the north side at Lawrence and Winchester, a second on the south side at 79th and Kenwood, and the third at 62nd and Western. In 1929 Sears took over the department store business of Becker-Ryan Company. In 1933 Sears tore down the old Becker-Ryan Company store in Englewood, and built the first windowless department store, inspired by the 1932 Chicago World's Fair.
After World War II, the company built many department stores in suburban shopping malls. The company was the largest retailer in the United States until the early 1980s but had dropped significantly in rankings by the time it merged with Kmart.
Diversification
Sears began to diversify in the 1930s, adding Allstate Insurance Company in 1931 and placing Allstate representatives in its stores in 1934. Over the decades it established major national brands, such as Kenmore, Craftsman, DieHard, Silvertone, and Toughskins. The company became a conglomerate during the mid-20th century, adding Dean Witter and Coldwell Banker real estate in 1981, starting Prodigy as a joint venture with IBM in 1984, and introducing the Discover credit card in 1985. In March 2009, Sears purchased the social search engine, Delver.
Divestiture and Sears Grand
In the 1990s the company began divesting itself of many non-retail entities, which were creating a burden on the company's bottom line.
In 1993, Sears stopped production of its general merchandise catalog because of sinking sales and profits. However, Sears Holdings does continue to produce speciality catalogs and reintroduced a smaller version of the Holiday Wish Book in 2007.
In 2003, Sears sold its retail credit card operation to Citibank. The remaining card operations were sold to JPMorgan Chase & Co. in August 2005.
In 2003, Sears opened a new concept store branded Sears Grand. Sears Grand stores carry everything that a regular Sears carries, plus health and beauty, toys, baby care, cleaning supplies, home decor, pet food, cards and party supplies, books, magazines, electronics, music, movies, and an edited assortment of groceries. Sears Grand stores are about 175,000 to 225,000 square feet (16,300 to 19,500 m²). The first Sears Grand store (and still the largest at 225,000 square ft) opened at Jordan Landing in West Jordan, Utah in 2003.
Merger with Kmart
Main article: Sears Holdings CorporationOn November 17, 2004, Kmart announced its intentions to purchase Sears. As a part of the merger, the Kmart Holdings Corporation would change its name to Sears Holdings Corporation. The new corporation announced that it would continue to operate stores under both the Sears and Kmart brands.
In 2005, the company began renovating some Kmart stores and converting them to the Sears Essentials format, only to change them later to Sears Grands .
Sears as a hedge fund
It has been speculated that Sears management is interested in more purchases beyond the Kmart takeover of Sears, and the idea that investor Edward Lampert is interested in becoming an investment company more than a retailer. Some of many possible targets are other companies that have low stock prices relative to company value. Some mentioned are Safeway, Home Depot, and Anheuser-Busch. The Washington Post , in an article dated March 11, 2007, described the current Sears as a hedge fund with money being diverted from the maintenance and improvement of stores to non-retail financial investments. A former executive is quoted as saying the company faces an "uncertain future". A third of pre-tax income in the third quarter of 2006 was generated by financial trades, followed by a poor fourth quarter in same.
Subsidiaries (before merger with Kmart)
Current
- Sears Department Store is a chain of Mid-Range department stores that are located in shopping malls; they carry clothing, jewelry, home appliances, hardware, lawn and garden supplies, lawn mowers, paint, sporting goods, automobile repair, office supplies, electronics and school supplies. Sears stores are usually multi-level. There are 926 full-size Sears stores in the United States. The largest Sears Department Store is located at the Toronto Eaton Centre.
- Sears Hardware Stores are chains of small hardware stores usually located in small towns that are far away from a larger Sears department store. They carry Sears' complete line of Craftsman tools, plus things like paint, electrical wiring, water heaters, tractor-mowers, bug zappers, thermostats, etc., generally things you would find in hardware stores, but only S
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