Sears

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Sears, Roebuck & Co.
TypeSubsidiary
IndustryRetail
FoundedChicago, Illinois (1893)
FoundersRichard Warren Sears
Alvah Curtis Roebuck
HeadquartersHoffman Estates, Illinois, U.S.
Number of locations2,248 (2010)
858 (2012) (US)[1]
Area servedUnited States, Canada, Mexico
ProductsClothing, footwear, bedding, furniture, jewelry, beauty products, appliances, housewares, tools, electronics, office supplies, school supplies
RevenueUS$ 21.649 billion (2012)
ParentSears Holdings
SubsidiariesSee below
Websitewww.sears.com
 
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For other uses, see Sears (disambiguation).
Sears, Roebuck & Co.
TypeSubsidiary
IndustryRetail
FoundedChicago, Illinois (1893)
FoundersRichard Warren Sears
Alvah Curtis Roebuck
HeadquartersHoffman Estates, Illinois, U.S.
Number of locations2,248 (2010)
858 (2012) (US)[1]
Area servedUnited States, Canada, Mexico
ProductsClothing, footwear, bedding, furniture, jewelry, beauty products, appliances, housewares, tools, electronics, office supplies, school supplies
RevenueUS$ 21.649 billion (2012)
ParentSears Holdings
SubsidiariesSee below
Websitewww.sears.com

Sears, Roebuck & Company is an American multinational department store chain[2] headquartered in Hoffman Estates, Illinois, in Greater Chicago. The company was founded by Richard Warren Sears and Alvah Curtis Roebuck in 1893 as a mail order catalog. Julius Rosenwald took control in 1895 and expanded its sales and profits greatly. In 1925, it began opening local department stores. The business peaked in the 1950s and 1960s, then began a long, slow contraction. In 2005, it was bought out by Kmart, which renamed itself Sears Holdings.

In 1973, it opened a new headquarters in the Sears Tower, a 108-story, 1,451-foot (442 m) skyscraper that was the tallest building in the world until 1998.

Until October 1989, Sears was America's largest retailer, when it was surpassed by Walmart in domestic revenue.[3] Target, Best Buy, and Home Depot have also surpassed Sears since.[4]

As of 2012, it is the fourth-largest U.S. department store company by retail sales and is the 12th-largest retailer in the United States, leading its competitor Macy's in 2013 in terms of revenue.[1][5]

History[edit]

Mail order catalog[edit]

Richard Sears

Richard Warren Sears was a railroad station agent in North Redwood, Minnesota, when he received from a Chicago jeweler an impressive shipment of watches which were unwanted by a local jeweler. Sears purchased them, then sold the watches for a considerable profit to other station agents, then ordered more for resale. Soon he started a business selling watches through mail order catalogs. The next year, he moved to Chicago, Illinois where he met Alvah C. Roebuck, who joined him in the business. In 1893, the corporate name became Sears, Roebuck & Co.

Farmers did business in small rural towns. Before the Sears catalog, farmers typically bought supplies (often at high prices and on credit) from local general stores with narrow selections of goods. Prices were negotiated (by the man of the family), and depended on the storekeeper's estimate of a customer's creditworthiness. Sears took advantage of this by publishing catalogs offering customers a wider selection of products at clearly stated prices. The business grew quickly.

The first Sears catalog was published in 1888. By 1894, the Sears catalog had grown to 322 pages, featuring sewing machines, bicycles, sporting goods, automobiles (produced from 1905 to 1915 by Lincoln Motor Car Works of Chicago, not related to the current Ford line),[6] and a host of other new items.

Sears, Roebuck And Company catalog, 1918. Vibrators advertised were for general massage, and were not sexual in nature.

By 1895, the company was producing a 532-page catalog. Sales were greater than $400,000 in 1893 and more than $750,000 two years later.[7] By 1896, dolls, stoves and groceries had been added to the catalog.

In 1906, Sears opened its catalog plant and the Sears Merchandise Building Tower in Chicago.[8] Also, by that time, the Sears catalog had become known in the industry as "the Consumers' Bible". In 1933, Sears issued the first of its famous Christmas catalogs known as the "Sears Wishbook", a catalog featuring toys and gifts, separate from the annual Christmas Catalog. The catalog also entered the language, particularly of rural dwellers, as a euphemism for toilet paper.[9] From 1908 to 1940, the catalog even included ready-to-assemble kit houses.[10]

Novelists and story writers often portrayed the importance of the catalog in the emotional lives of rural folk. For children and their parents, the catalog was a "wish book" that was eagerly flipped through. It was not a question of purchasing but of dreaming; they made up stories about the lives of the models on the pages. The catalog was a means of entertainment, though much of its magic wore off with the passing of childhood.[11]

Rosenwald takes control[edit]

Sears, Roebuck & Co. letterhead boasting of its Chicago plant, 1907

In 1893, Richard Sears and Alvah Roebuck renamed their watch company Sears, Roebuck & Company and began to diversify. The company had sales of $800,000 in 1895, but the national Panic of 1893—a full scale depression—caused a cash squeeze and large quantities of unsold merchandise. Roebuck decided to quit (though he later returned in a publicity role). Sears offered Roebuck's half of the company to Chicago businessman Aaron Nusbaum, who in turn brought in his brother-in-law Julius Rosenwald, to whom Sears owed money. In August 1895, they bought Roebuck's half of the company for $75,000. The new Sears, Roebuck and Company was re-incorporated in Illinois with a capital stock of $150,000 in August 1895. The transaction was handled by Albert Henry Loeb of the Chicago Law Firm of Loeb & Adler (now known as Arnstein & Lehr, LLP). Copies of the transaction documents are now displayed on the walls of the Law Firm.[12] One of these documents, the Sears Roebuck & Co. Profit & Loss Statement dated January 13, 1895 is attached.

Sears Roebuck & Co. Profit and Loss Statement dated January 13, 1895

Sears and Rosenwald got along well, but Nusbaum was a problem. Sears and Rosenwald bought him out for $1.3 million in 1903.[13]

Rosenwald brought to the mail order firm a rational management philosophy and diversified product lines: dry goods, consumer durables, drugs, hardware, furniture, and nearly anything else a farm household could desire. From 1895 to 1907, under Rosenwald's leadership as Vice President and Treasurer, annual sales of the company climbed from $750,000 to upwards of $50 million. The prosperity of the company and their vision for greater expansion led Sears and Rosenwald to take the company public in 1906, with $40 million in stock. After Sears resigned the presidency in 1908 due to declining health, Rosenwald was named president and chairman of the board and had full control.[14] Sears's successful 1906 initial public offering (IPO) marks the first major retail IPO in American financial history and represented a coming of age, financially, of the consumer sector.[15]

The company was badly hurt during 1919-21 as a severe depression hit the nation's farms after farmers had overexpanded their holdings. To bail out the company, Rosenwald pledged $21 million of his personal wealth. By 1922, Sears had regained financial stability. First he oversaw the design and construction of the company's first department store within Sears, Roebuck's massive 16-hectare (40-acre) headquarters complex of offices, laboratories and mail-order operations at Homan Ave. and Arthington St. on Chicago's West Side. The store opened in 1925. In 1924, Rosenwald resigned the presidency, but remained as chairman until his death in 1932; his goal was to devote more time to philanthropy.[16]

Retail stores[edit]

The mail order market was based on rural America, with a slow-growing population and far less spending power than urban America. Rosenwald decided to shift emphasis to urban America, and brought in Robert E. Wood to take charge. The first Sears retail stores were opened in conjunction with the company's mail order offices, typically in working-class neighborhoods far from the main shopping center. Sears was a pioneer in creating department stores that catered to men as well as women, especially with lines of hardware and building materials. It deemphasized the latest fashions in favor of practicality and durability, and allowed customers to select goods without the aid of a clerk. Its stores were oriented to motorists - set apart from existing business districts amid residential areas occupied by their target audience; had ample, free, off-street parking; and communicated a clear corporate identity. In the 1930s, the company designed fully air-conditioned, "windowless" stores whose layout was driven wholly by merchandising concerns.[17]

From the 1920s to the 1950s, Sears built many urban department stores, and they overshadowed the mail-order business. Starting in the 1950s, the company expanded into suburban markets, and malls in the 1960s and 1970s. In 1959, it had formed the Homart Development Company for developing malls. Many of the company's stores have undergone major renovations or replacement since the 1980s.

Diversification[edit]

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, Supertone, 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.

In the 1990s, the company began divesting itself of many non-retail entities, which were detrimental to the company's bottom line. Sears spun off its financial services arm which included brokerage business Dean Witter Reynolds and Discover Card. It sold its mall building subsidiary Homart to General Growth Properties in 1995.[18] Sears later acquired hardware chain Orchard Supply Hardware in 1996 and started home improvement store The Great Indoors in 1997.[19]

In 1993, Sears terminated its famous general merchandise catalog because of sinking sales and profits. Sears Holdings continues to produce specialty catalogs and reintroduced a smaller version of the Holiday Wish Book in 2007.

2000s[edit]

The mall entrance to the Sears Grand store at the Pittsburgh Mills Mall in Tarentum, Pennsylvania.

In 2003, Sears sold its retail credit card operation to Citibank.[20] The remaining card operations were sold to JPMorgan Chase in August 2005. In 2003, Sears opened a new concept store called Sears Grand. Sears Grand stores carry everything that a regular Sears carries, and more. Sears Grand stores are about 175,000 to 225,000 square feet (16,300 to 19,500 m²).

A Sears Essentials, now a Sears Outlet, in West Palm Beach, Florida

On November 17, 2004, Kmart announced its intentions to purchase Sears. As a part of the purchase, 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.[21]

Corporate affairs[edit]

[edit]

Employee relations[edit]

Sears building in the Edificio La Nacional building in Mexico City, across from the Palacio de Bellas Artes.

Sears has struggled with employee relations. One notable example was the shift in 1992 from an hourly wage based on longevity to a base wage (usually anywhere from $3.50 to $6 per hour) and commissions ranging from 0.5% to 11%. This new base wage, often constituting a substantial (up to 40%) cut in pay, was done "to be successful in this highly competitive environment."[22]

In early October 2007, Sears cut commission rates for employees in select departments to anywhere from 0.5% to 4% but equalized the base wage across all Home Improvement and Electronics departments. In 2011, commission rates on non-base items were cut by 2% in the electronics department. In late 2009, the commission on sales of "base items" from the electronic department was cut to 1%. Appliances, vacuums, and mattresses are the only remaining departments where compensation is based entirely on commission. In many stores, jewelry department associates receive a low base salary with 1% commission on their sales.

The domain sears.com attracted at least 240 million visitors annually by 2011, according to a Compete.com survey.

Sears saw profits drop 13% during the fourth quarter of 2010 but still had total assets of $26.05 billion as of the first quarter of 2011.[23]

Subsidiaries[edit]

Sears department store at the Hawthorn Center in Vernon Hills, Illinois

Current[edit]

A Sears Parts & Repair store in Brooklyn, Ohio.

Former[edit]

Exclusive brands[edit]

The exterior of the Sears Merchandise Building Tower.

Properties[edit]

Sears Tower[edit]

Sears Tower (now Willis Tower)

Sears made history in 1974 when it completed the 110-story Sears Tower in Chicago. The tower became the world's tallest building upon its completion, a title it took from the former World Trade Center towers in New York.

Seeking to spread its operations out in a business park, Sears left in 1993 and subsequently sold the tower, moving to Hoffman Estates, Illinois. Even though its naming rights to the building expired in 2003 it remained the Sears Tower through early 2009. In March 2009 London-based insurer Willis Group Holdings, Ltd., was given the building's naming rights to entice the occupancy of the building. The official renaming as the Willis Tower took place on Thursday, July 16, 2009, during a public ceremony hosted by Willis Group Holdings.[54] Despite this, the tower is still frequently referred to as the Sears Tower by the general public, especially by locals.

Headquarters[edit]

Sears moved to the new Prairie Stone Business Park in Hoffman Estates, Illinois, between 1993 and 1995. The office park has a focus on technology and sustainability, featuring an extensive landscaping plan that uses native prairie plants wherever possible, and a system of several express bus routes coordinated with Pace to encourage public transportation use with a future stop on the Metra STAR Line.[55] Despite these services, the remote location of Prairie Stone means that it is much less well served by public transportation than the centrally located Sears Tower.

But it's access to Interstate 90 makes it easier to commute to the Hoffman Estate location, then fighting the gridlock of downtown Chicago, where the Sears Tower is located.

Sears Centre[edit]

The Sears Centre is a 10,001-seat multi-purpose arena located in Hoffman Estates adjacent to the Prairie Stone campus.[56]

See also[edit]


References[edit]

  1. ^ a b "Department Stores". STORES.org. Retrieved 2014-01-15. 
  2. ^ "Sears Holdings - About Sears, Roebuck & Co.". Sears Holding Corporation. Retrieved 2012-02-25. 
  3. ^ "1990 Sales Lift Wal-mart Into Top Spot". Sun Sentinel. 1991-02-15. Retrieved 2014-01-15. 
  4. ^ Gelles, David (2013-10-29). "For Once-Mighty Sears, Pictures of Decay". The New York Times. 
  5. ^ "2012 Top 100 Retailers". STORES.org. Retrieved 2014-01-15. 
  6. ^ Clymer, Floyd. Treasury of Early American Automobiles, 1877–1925. (New York: Bonanza, 1950), p.90.
  7. ^ "Sears History - 1890s." Sears. Last updated 2004-09-27.
  8. ^ Book: Historic Sears, Roebuck and Co. Catalog Plant ISBN 0-7385-3977-5, opening date.
  9. ^ Rodriguez, Linda (2009-07-08). "Why toilet paper belongs to America". CNN.com. Retrieved 2010-08-29. 
  10. ^ "Sears mail order homes". Retrieved 2011-11-30. 
  11. ^ Marcel Arbeit, "Sears, Roebuck Catalog Games: The Portable Shop Window and Southern Literature," European Contributions to American Studies (2006) , Vol. 65, pp 29-40.
  12. ^ Arnstein & Lehr, The First 120 Years (2013).
  13. ^ Emmet and Jeuck, Catalogues and Counters (1950) pp 47-53
  14. ^ Emmet and Jeuck, Catalogues and Counters (1950) pp 53-57
  15. ^ Gregory D. L. Morris, "Attention Shoppers: 1906 Sears IPO Heralds the Triumph of the Consumer Economy," Financial History (2007), Issue 88, pp 20-36
  16. ^ Peter M. Ascoli, Julius Rosenwald: The Man Who Built Sears, Roebuck and Advanced the Cause of Black Education in the American South, (2006).
  17. ^ Richard Longstreth, "Sears, Roebuck and the Remaking of the Department Store, 1924-42," Journal of the Society of Architectural Historians (2006) 65#2 pp 238-279
  18. ^ Jim Zarroli (April 19, 2009). "Retail Real Estate Braces For Sell-Off". National Public Radio. 
  19. ^ Donald R. Katz, The Big Store (1987)
  20. ^ By ANDREW ROSS SORKINPublished: July 16, 2003 (2003-07-16). "Sears to Sell Card Portfolio To Citigroup For $3 Billion". New York Times. Retrieved 2014-01-15. 
  21. ^ "Sears ditches Sears Essentials name". Chicagobusiness.com. 2006-02-22. Retrieved 2009-07-17. 
  22. ^ 600-plus Sears jobs to be cut Chicago Tribune February 13, 1992
  23. ^ "Sears Sees Falling Sales on TVs, Computers and DVDs as Fourth Quarter Profit Drops 13%". Quarterly Retail Review. February 27, 2010. 
  24. ^ "About Sears". Retrieved 2009-07-17. 
  25. ^ "Sears History". Searsmedia.com. Retrieved 2010-01-01. 
  26. ^ "Sears Grand Fact Sheet". Searsmedia.com. Retrieved 2009-07-17. 
  27. ^ "Sears celebrates new name". The Emporia Gazette. March 16, 2009. Retrieved November 25, 2009. 
  28. ^ a b Young, Vicki M. (6 December 2013). "Sears to Spin Off Lands' End". WWD. Retrieved 8 December 2013. 
  29. ^ This Week in Consumer Electronics, Whirlpool Bears First Fruits Of Maytag Merger At Home Depot, 10/09/2006.
  30. ^ Yard and Garden, Filling the gap: now that home centers are "servicing what they sell," where do dealers fit into this rapidly changing retail channel?; Profitably running your service department, March, 2005.
  31. ^ "Sears to Expand Stand-Alone Auto Outlets", New York Times, March 20, 1997
  32. ^ a b "Sears Plans to Sell National Tire and Battery for $260 Million", by Constance L. Hays, New York Times, September 23, 2003
  33. ^ "A surprisingly new style for Sears: Homelife, Sears new power furniture format, is unlike anything seen before at the nation's largest retailer". Findarticles.com. 1989. Retrieved 2009-07-17. 
  34. ^ "HomeLife Furniture closes its doors". Bizjournals.com. 2001-07-11. Retrieved 2009-07-17. 
  35. ^ Schenke, Jarred (2000-09-15). "Sears eyeing South DeKalb as site for new urban store". Atlanta.bizjournals.com. Retrieved 2009-07-17. 
  36. ^ "Sears to open urban store". Enquirer.com. Retrieved 2009-07-17. 
  37. ^ Said, Carolyn (January 4, 2012). "Orchard Supply on its own again". San Francisco Chronicle. Retrieved July 20, 2012. 
  38. ^ "Allstate: 1926–1995 (Sears' divestment)". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  39. ^ "Cheryl Tiegs: 1981–1989". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  40. ^ "Coldspot: 1928–1976". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  41. ^ "Craftsman: The Standard of Quality". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  42. ^ "David Bradley: 1910–1966". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  43. ^ "DieHard: 1967–present". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  44. ^ "Economy: 1902–1947". 
  45. ^ "Shop for General Purpose Tools in the Evolv Tools department of Craftsman.com". Evolvtools.com. Retrieved December 20, 2012. 
  46. ^ "Harmony House: 1940–1968". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  47. ^ "Hercules: 1908–1965". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  48. ^ "J.C. Higgins: 1908–1964". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  49. ^ "Kenmore: America's Favorite Home Appliance Brand". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  50. ^ "Pilgrim: 1905–1964". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  51. ^ "Roebucks: 1949–present". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  52. ^ "Silvertone: 1915–1972". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  53. ^ "Toughskins: 1971–present". Searsarchives.com. 2006-10-31. Retrieved 2009-07-17. 
  54. ^ Conlon, Michael (2009-03-12). "Tallest U.S. building to get new name". Reuters. Retrieved 2009-07-17. 
  55. ^ [1] Prairie Stone Transportation site.
  56. ^ [2] Prairie Stone Business Park, Current Sears headquarters location and Sears Centre.

Further reading[edit]

Primary sources[edit]

External links[edit]