The rise and fall of Sears is the perfect symbol of retail's challenges over the last decade

Mike Segar/ReutersSears is a case study in the importance of not falling behind in retail.

Sears, Roebuck, & Co. could practically touch the sky in 1969. At the height of its powers, the retailer began constructing a Chicago skyscraper to house its employees that year. Finished in 1973, Sears Tower was, for a time, the tallest building in the Western Hemisphere.

Three decades later, the naming rights to the tower expired. Sears by then was a far different business from the company that had undertaken the skyscraper project. The New York Times reported that by 2004, the company had vacated its namesake building altogether. In 2009, the Willis Group bought the naming rights.

Now, 10 years later, Sears is emerging from a traumatic bout with bankruptcy, closing stores by the hundreds and laying off employees by the thousands.

Retail is often an unforgiving industry, and the company’s experience over the past decade has been a clear reflection of the importance of avoiding falling behind. Where other retailers like Walmart and Target have succeeded by adapting to challenges like the rise of e-commerce, Sears has struggled to find its footing.

Meanwhile, Sears’ current predicament also raises questions about the importance of meeting consumer expectations. Former CEO Eddie Lampert has been accused by critics – including former executives who spoke to Business Insider’s Hayley Peterson in 2017 – of rendering many Sears and Kmart stores crumbling ghost shops in his bid to cut costs and keep the company afloat.

Here’s a look back at how things have gone from bad to worse for the struggling department store chain, and what it demonstrates about the world of retail:


Sears was once the largest retailer in the world, boasting over 3,500 stores in the United States.

AP Photo/David Zalubowski

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Nowadays, the department store chain is in a struggle for its very survival, having closed over 3,000 of those stores over the past decade, as of November 2019.

Shoshy Ciment/Business Insider

Source: Business Insider


In 2017, the company saw $US17 billion in sales — down $US26 billion from 2010.

Shoshy Ciment/Business Insider

Source: Business Insider, Business Insider, Business Insider


Now, given the 2008 recession, the rise of e-commerce, and the raging retail apocalypse, it hasn’t been an easy 10 years for any traditional brick-and-mortar retailers.

Reuters

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Still, other macro trends like the decline of the once-dominant department store format — which big boxes and specialty retailers were able to dodge, for the most part— did hurt Sears, in particular.

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For the most part, however, the situation at Sears is emblematic of the decade, not because it represents a gloomy example of the woes befalling the industry …

Shoshy Ciment/Business Insider

… but because it is a case study for the crucial importance of keeping up with the times, especially when it comes to tailoring the shopping experience to suit customers’ needs.

Shoshy Ciment/Business Insider

Billionaire investor Eddie Lampert, who took over as CEO of Sears in 2013, stepped down from that position in October 2018. He has blamed Sears’ struggles on e-commerce, changing consumer preferences, and even negative media coverage.

AP

Source: Business Insider, Forbes


But Lampert himself has been criticised for focusing more on making financial manoeuvres than boosting the store experience …

Bethany Biron/Business Insider

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… resulting in messy, understaffed Sears and Kmart locations that drove away prospective customers.

Shoshy Ciment/Business Insider

Source: Business Insider


On the other hand, Sears Holdings spent $US5.8 billion on share buybacks between 2005 and 2010.

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Speaking to Business Insider’s Hayley Peterson in 2017, former Sears executives criticised this handling of the company’s struggles.

Associated Press

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At the same time, loans from Lampert’s firm ESL Investments can be credited with sustaining the retailer for years.

Peter Morgan PM/Reuters

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Fellow billionaire investor Warren Buffett, who Lampert was once likened to, has expressed the opinion that the one-time Sears CEO was in a no-win situation.

Dennis Van Tine/AP Images

Source: Business Insider, The New York Times, CNN


In 2005, Buffett was quoted as saying that it was “very difficult” to turn around “a retailer that has been slipping for a long time.”

Bill Pugliano / Stringer / Getty Images

Source: Business Insider, The New York Times, CNN


The year before, Sears had merged with Kmart, and Lampert had become the chairman of the newly formed retail giant.

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Source: CNN


Back in 2005, Buffett said he’d “rather look for easier things to do” than reviving underperforming retailers. In other words, in the retail business, lagging behind the pack can be tantamount to a death sentence.

Bethany Biron/Business Insider

Source: Business Insider, The New York Times, CNN


For its part, Sears has tried to catch up in recent years. In October 2019, the brand launched a subscription-based Amazon Prime-style membership tier.

Smith Collection/Gado/Getty Images

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But not all of these experiments have ended well. Perhaps most ominously, Sears’ “store of the future” format — a smaller, modernised store with a focus on boosting the customer experience — closed in April 2019, just six months after opening.

Shoshy Ciment/Business Insider

Source: Business Insider


Sears’ journey throughout the past decade best illuminates the cutthroat nature of retail today. Failure to invest in the business in order to keep up with consumer preferences resulted in lots of pain for Sears, regardless of the one-time strength of its brand.

Bethany Biron/Business Insider

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