How Sears went from gilded-age boom to modern-day bust

To an entire generation of young shoppers, Sears is the store they least want to visit in the mall they rarely patronize.

But for much of its 132-year history, the company was at the forefront of American retail. Its early mail-order and distribution innovations made it the Amazon of the Gilded Age.

Later, its vast spread of brick-and-mortar stores positioned it in prime retail locations across the country. For years, it was the largest retailer in the United States, operating out of the tallest building in the world. At various points, it sold products like fishing tackle, tombstones, barber chairs, wigs and even a “Stradivarius model violin” for $6.10.

In the last decade, however, little of that splendor has been evident. The company has lost money for years, its head count has fallen by hundreds of thousands of employees, and it has several thousand fewer stores than it did in 2008. Even the landmark Sears Tower in Chicago — which it no longer owns — was renamed, after an insurance company.

Sears has defied predictions of its bankruptcy for years. Recently, it avoided that fate by purging its classic in-house brands and selling its real estate. But early Monday morning, facing a $134 million debt payment, the company filed for bankruptcy protection.

Here are some key moments in Sears history.

1886

An empire built on a few watches

Richard Sears, a railway station agent, started the R.W. Sears Watch Co. in Minneapolis after buying a batch of watches from a local jeweler and selling them to fellow agents. The next year, he moved the business to Chicago and hired Alvah C. Roebuck, a watchmaker, through a classified ad.

1896

The ‘wish book’ goes rural

The enterprise, renamed Sears, Roebuck and Co., benefited from a U.S. Postal Service program called Rural Free Delivery, which extended mail routes into rural areas. By then, the company’s catalog spanned more than 500 pages (eventually, some editions of the so-called wish book would fatten to more than 1,000 pages).

1906

A Goldman Sachs-aided stock listing

Sears went public with preferred shares selling at $97.50 each, or more than $2,500 now. Goldman Sachs managed the offering.That year, Sears also opened a mail-order distribution center on Chicago’s West Side that, with 3 million square feet of floor space, was among the largest buildings of its kind in the world. In 1908, the company began marketing home kits via mail order. By 1940, it had sold more than 70,000 houses in 447 styles.

1925

A brick-and-mortar boom

Nearly 40 years after going into business, the company opened its first retail store, in Chicago. Within five years, it had more than 300 outlets, selling in-house brands like Kenmore and Craftsman.

The expansion was coordinated by Robert E. Wood, a general during World War I. He realized, while examining census data, that increasingly mobile Americans were moving into and around cities and wanted to browse products in person.

The company later created Allstate Insurance, a nod to the growing number of customers with cars. In 1931, retail sales topped mail-order sales.

1957

An index debut

The Standard & Poor’s 500-stock index debuted with Sears as one of the original members (a position the company exited in 2012). The company was part of the Dow Jones industrial average from 1924 until 1999.

1973

Topping the competition

The company, by then the largest retailer in the country for years, moved its headquarters to the Sears Tower. The Chicago landmark was the tallest building in the world for 25 years. In 1988, Sears tried resolve some of its financial difficulties by selling the structure, but it failed to find a buyer. Amid slumping local real estate values in 1994, Sears transferred ownership to two lenders. The building was renamed the Willis Tower in 2009.

1981

‘Socks and stocks’

Sears pursued a strategy known as “socks and stocks,” trying to incorporate financial services into its retail strategy by buying up Dean Witter Reynolds, a stockbroker, and Coldwell, Banker & Co., a real estate broker. Its Discover card, begun through Dean Witter in 1985, was popular.

1989

Cutting deeply

Pressured by competitors like Walmart, which later surpassed Sears as the top retailer in the United States, the company began a campaign of cuts. It slashed prices on most of its inventory and in time shut its catalog operation, closed hundreds of stores and laid off tens of thousands of employees. Stores began carrying more outside brands and accepting nonstore credit cards to entice customers.

1992

Fraud accusations

The California Department of Consumer Affairs accused Sears auto repair shops of engaging in systematic fraud, accusations soon echoed by other states. The agency said that in nearly 90 percent of visits by undercover investigators, employees suggested unnecessary repairs. Sears denied the accusations but soon had other concerns to address.

In the next few years, Sears began spinning off parts of Allstate and Dean Witter, eventually distributing the rest to shareholders. It divested itself of the Discover card, Coldwell Banker, the Sears Mortgage Banking Group and Prodigy, an online portal it had developed with IBM. In 2003, Sears sold its portfolio of private-label and co-branded cards — which accounted for 60 percent of its annual profits — to Citigroup for $3 billion in cash. The company moved its headquarters to Hoffman Estates, Illinois.

2005

Enter Edward Lampert

Edward S. Lampert, a billionaire investor and Kmart’s largest shareholder, finished merging the retailer with Sears in a deal worth more than $11 billion, creating a company called Sears Holdings. A few years later, the economy went into a tailspin and e-commerce gained more traction. Malls, and the cavernous Sears stores anchoring many of them, steadily lost their appeal. Sales at Sears, which Lampert had promised would be “unrecognizable” in 30 years, were soon trailing those of its competitors.

2013

Sears gets siloed

Lampert became chief executive, largely overseeing the company from afar via videoconference and splitting up the management hierarchy into separate silos, which was said to have resulted in clashes between departments over company resources. Sears moved to spin off Lands’ End at the end of the year; the apparel company’s market value is now many times that of Sears. Other businesses, including Sears Hometown and Outlet and Sears Canada, were also removed.

2015

The real estate move

Lampert engineered a real estate maneuver in which Sears, for $2.7 billion in cash, sold 235 stores to Seritage Growth Properties, a spinoff company formed by Lampert and other investors. For a time, that group included Steven Mnuchin, now the Treasury secretary and Lampert’s Yale roommate. Seritage began redeveloping prime Sears and Kmart locations into more profitable multi-use properties while still collecting rent from Sears for stores that remained open. A shareholder lawsuit over the deal, which made accusations of conflicts of interest, was settled for $40 million in 2017. At the time, Lampert was pushing a membership rewards program called Shop Your Way, which he hoped would transform the company and build shopper loyalty.

2017

From savior to pirate

The company expressed “substantial doubt” about its “ability to continue as a going concern” after failing to turn a profit since 2010, shedding brands like Craftsman and taking more than $800 million in loans from Lampert and his hedge fund, ESL Investments. Lampert, once hailed as the next Warren Buffett but increasingly described as a financial pirate, was accused of stripping Sears of its assets. Whirlpool, a Sears partner since 1916, stopped selling its appliances through the chain.

2018

Last gasps

Amid a steady stream of announcements about planned store closings in recent years, and partnerships with Amazon, Lampert continued to ramp up his warnings about a possible bankruptcy.