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Sears, Roebuck and Company
Type Subsidiary of Sears Holdings Corporation
Founded 1886 (Chicago, Illinois, USA)
Headquarters Hoffman Estates, Illinois, USA
Industry Retail
Products Clothing, footwear, bedding, furniture, jewelry, beauty products,
appliances, housewares, tools, and electronics.
Revenue $23.6 Billion
Slogan Where It Begins
Website www.sears.com
Sears, Roebuck and Company is an American mid-range chain of international
department stores, founded by Richard Sears and Alvah Roebuck in the late
19th century. It operates in Canada under Sears Canada and Mexico under
Sears Mexico. 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. Sears merged with Kmart in early
2005, creating the Sears Holdings Corporation.
The company competes on an average price level on par with J.C. Penney and
Kohl's. Sears has also recently rivaled with Belk, Dillard's, and Macy's.
The largest Sears store in the world, operated by Sears Canada, is 817,850
square feet, in the Toronto Eaton Centre. The largest American store is
located at Woodfield Mall in Schaumburg, Illinois, a suburb of Chicago. It
has 416,000 square feet of retail space.
History
In 1886, the United States contained only thirty-eight states. Many people
lived in rural areas and relied on agriculture. For many Americans, a single
general store was their source of supplies. Merchandise went through many
wholesalers on the way to the retail outlet, not an inexpensive method of
handling. Many general stores received their shipments of merchandise
through the growing network of railroads.
Richard Sears and a shipment of watches
Richard Sears was a railroad station agent in North Redwood, Minnesota when
he received a shipment of watches from a Chicago jeweler which were unwanted
by a local jeweler. Sears purchased them himself, sold the watches at a nice
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
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 business
name became Sears, Roebuck and Company.
Competing with general stores through 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 soon grew quickly.
By 1894, the Sears catalog had grown to 322 pages, featuring sewing
machines, bicycles, sporting goods, and a host of other new items.
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 Company 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 which included the original Sears
Tower pictured on this page.[1]
Selling, advertising, merchandising - these were Richard Sears' talents, not
organizing the company so it could handle orders on an economical and
efficient basis. That was left to Chicago clothing manufacturer Julius
Rosenwald, who bought into the company in 1895.
Sears catalog homes
People had learned to trust Sears for other products bought mail-order, and
thus, sight unseen. This laid important groundwork for supplying a home,
possibly the largest single investment a typical family would ever make. In
1908, the company began offering entire houses as kits, marketed as Sears
Modern Homes, and by the time the program ended in 1940, over 100,000 had
been sold.
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.[2] The first freestanding retail store opened October 5, 1925
in Evansville, Indiana.[3] 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 worlds fair.
The Sears, Roebuck catalog was sometimes referred to as "the Consumers'
Bible." The Christmas Catalog was known as the "Wish Book", perhaps because
of the toys in it. The catalog also entered the language, particularly of
rural dwellers, as a euphemism for toilet paper. In the days of outhouses
and no readily available toilet paper, the pages of the mass-mailed catalog
were used as toilet paper.
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.
The highest grossing Sears store in the World is located in Puerto
Rico
Store brands, diversified services, Allstate, and Discover
Sears diversified and became a conglomerate during the mid-20th century. It
established several major brands of products such as Kenmore, Craftsman,
DieHard, Silvertone (electronics) and Tuff-skin. The company started the
Allstate Insurance Company back in 1931, and had representatives operating
in its stores as early as 1934. It purchased Dean Witter and Coldwell Banker
real estate in 1981, and started what became Prodigy as a joint venture with
IBM in 1984. It also introduced the Discover credit card in 1985. During the
late-1980s, and as late as 1993, the Discover card was the only accepted
credit card at many Sears retail locations.
Alvah Roebuck returned to the organization during the Great Depression, and
worked as a spokesperson until his death some years later. 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.
Logo
The Sears logo currently used on most store signage was created in 1984.
Previously, the Sears logo consisted of the name "Sears" in a rectangle. Now
it consists of the blue text, Sears, with a white line separating each
letter down along the length of its strokes. In late 2004, the logo was
switched from all upper case to mixed case for catalogs and other marketing
methods.
Sears formerly traded on the New York Stock Exchange (NYSE) under the ticker
of "S", which is now used by the Sprint Nextel Corporation. Sears, Roebuck
and Company is also a former Dow Jones Industrial Average component, listed
from January 22, 1924 to October 29, 1999.
1981-2005
Adam Walsh, the young son of reporter John Walsh (America's Most Wanted),
was abducted from a Sears department store in Florida in 1981 and
subsequently murdered. As a result of the incident, Wal-Mart responded by
creating Code Adam, a set of procedures to locate children that are reported
missing while in the store. Similar procedures have been implemented by
other retailers.[4]
In the 1980s and 1990s, the company divested 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 specialty catalogs and the Holiday Wish Book.
In 2003, Sears sold its retail credit card operation to Citibank. The
remaining card operations were sold to JPMorgan Chase & Company in August,
2005. This launched the new Sears Gold MasterCard.
Ever since the sale of credit to Citibank, the interest rates on Sears Cards
have gone up significantly. The starting rate on a regular Sears Card is
currently 25.40%. The starting rate on the Sears Gold Mastercard is 19.4%,
and up.
In the early 1980s, Sears ceased selling shotguns, which had previously been
sold primarily under their internal J C Higgins sporting brand from 1908
until 1961, and this alienated them from some of their historical core of
rural and working-class consumers.
In the late-1990s, the company's market share in many areas deteriorated as
Wal-Mart drew away working-class consumers, and Federated Department Stores
attracted wealthier consumers. Sears has also been shouldered with the
problem of keeping a sound legal basis for its actions. A number of class
action lawsuits have been prepared and successfully won against the company.
In 2005, Sears began adopting certain tactics used by competitors. For the
first time in October 2005, they created a restocking fee of 15% on many of
the stores items over $150. For merchandise being delivered, there is a 15%
restocking fee for merchandise returned.
Sears Grand prototype
In 2003, Sears opened a new hypermarket concept brand named 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
a full-line of groceries. Sears Grand stores are about 175,000 to 225,000
square feet (16,300 to 19,500 m˛). The first Sears Grand store (and still
the largest at 225,000 square feet) opened at Jordan Landing in West Jordan,
Utah in 2003. In 2005, the company began renovating some Kmart stores and
converting them to the Sears Essentials[5] format, only to change them later
to Sears Grand format. Sears Essentials signs still have not been changed on
many stores that were changed prior to this decision.
Merger with Kmart
On 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.
Possible future acquisitions
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 source linked here speculates that Sears
Grand could be expanded in combination with Safeway's Grocery stores.[6]
Another potential purchase is Radio Shack since former Kmart CEO took over
as CEO and chaiman.[7] 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." Surprisingly, a third of pre-tax income in the third
quarter of 2006, according to the Washington Post, was due to financial
trades not the retail business. However, these investments performed poorly
in the fourth quarter.[8]
Subsidaries
Current
* Sears is a chain of mid-range department stores that are located in
shopping malls; they carry clothing, jewelry, 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 870 full-size Sears stores in the United States.
* Sears Grand is a chain of free-standing hypermarkets located away from
shopping malls. They carry everything a regular Sears carries, plus health
and beauty products, toys, baby care, cleaning supplies, home décor, pet
food, cards and party supplies, books, magazines, music, movies, and a
full-line of groceries. Sears Grand stores range from 165,000 to 210,000
square feet (15,300 to 19,500 m˛) [9]. The first Sears Grand opened at
Jordan Landing in West Jordan, Utah in 2003. At 225,000 square feet, the
Jordan Landing store is currently the largest in the chain. Unlike many
other hypermarkets in the United States (such as Wal-Mart Supercenters and
Meijer), Sears Grand stores are not continuously open, but have longer hours
than typical Sears stores.
* Sears Hardware is a chain of hardware stores that carry the whole line of
Sears hardware and are usually free-standing or located in strip malls.
Typically these stores are about 25,000 square feet.
* Sears Appliance Dealer is a chain of smaller stores that are operated as
franchises. These stores are usually located in smaller markets that do not
support full-sized Sears. They are signed as Sears and are usually
free-standing or located in strip malls. They primarily concentrate on
hardware, appliances, and lawn and garden supplies.
* Sears Outlet is an outlet version of Sears department stores located in
outlet malls and stand alone strip malls fading out these stores ranged from
the specialized, just appliances, to full merchandise. Typically reselling
customer returned functional, unboxed catalog and retail items at great
discount.
* Sears Parts & Repair is a chain of service centers that typically sell
parts for appliances and also feature a carry-in point for customers to
bring merchandise in that needs repaired either in or out of warranty.
Typically labeled Sears Service Center or Sears Home Central, two names that
also refer to the Parts and Repair centers. Sears has started closing many
of these down as more and more of its service and repair business is
home-based.
* The Great Indoors is a chain of free-standing home décor stores that carry
high end appliances, bedding, and kitchen and bath fixtures. The Great
Indoors stores are 130,000 square feet (12,000 m˛).
* Lands' End aside from carrying the Lands' End clothing line at Sears
stores, Sears Holdings also operates 16 Lands' End stores that carry only
Lands' End clothing. These stores are located in outlet malls and regular
malls.
* Orchard Supply Hardware, known as Orchard or OSH for short, is a chain of
free-standing hardware stores that carry home repair, hardware products and
lawn and garden supplies. Orchard Supply Hardware stores are 40,000 square
feet (4,000 m˛). There are currently 84 stores, all of them in California.
Sears now owns 80.1% of the chain, and revealed intentions in May 2005 to
spin it off. Richard Karn of Home Improvement fame was a spokesman for the
chain.
* A & E Factory Services is a joint venture held by Whirlpool and Sears
Holdings.[10] A & E Factory Service is a network of mobile service vans with
a long history of performing appliance repairs.[11]
Former
* Sears Brand Central was an electronics store.
* Sears Catalog Stores were located in small towns. These stores were very
small, even smaller than Sears' current Hometown Dealer stores. At catalog
stores, some items could be ordered from the floor, such as appliances;
other items could be ordered from catalogs at the store. These stores were
often placed in rural markets which were far from full-line Sears stores,
allowing for customers to purchase Sears products more easily. These stores
were closed in 1993 when Sears closed its catalog business.
* Sears HomeLife was a chain of furniture stores owned by Sears. The concept
was introduced at a mall in Fresno, California in 1989, followed by a
stand-alone store in Madison, Wisconsin.[12] Sears sold the stores to
Citicorp Venture in 1999, who changed the chain's name to just "HomeLife".
They opened many locations inside large Sears stores or near the store
depending on space available. HomeLife closed its last stores in 2001.[13]
* Sears Neighborhood was a chain similar to Sears Hometown stores, except
that Neighborhood stores were located in urban markets. An average Sears
Neighborhood store was 6,800 square feet. These stores were also
independently owned and operated. The concept was introduced in Atlanta in
1998, and another similar store was located in Cincinnati.[14][15] The
Neighborhood stores closed in the early 2000s.
Sears Tower and Sears Merchandise Building Tower
Sears, Roebuck and Company built the famed Sears Tower, which was completed
in 1974. This building, located in Chicago, is the tallest building in the
United States. The company, however, no longer owns the building.
Employee Relations
Sears has struggled with employee relations. One noteable example being the
shift in 1992 from an hourly wage based on longevity, to a base wage and
commisions. This new base wage, often a substantial cut was done in the
interest of "to be successful in this highly competitive environment."
600-plus Sears jobs to be cut Chicago Tribune February 13, 1992
Prairie Stone Business Park
This is the current headquarters of the Sears Holdings Corporation in
Hoffman Estates, Illinois. A modern suburban office park location seen as
more efficient campus type setting in a suburb, than the downtown Sears
Tower Chicago location. Recently opened is the 25% Sears owned Sears Centre
Arena continuing the common practice of naming a sports arena/expo center
for an extended period of time. Ryan Companies owns the remaining 75%, other
offices and hotels are being developed on the Prairie Stone campus.[16]
References
1. ^ Book: Historic Sears, Roebuck and Co. Catalog Plant ISBN 0-7385-3977-5,
opening date
2. ^ Sears Archives. Sears. Retrieved on 2007-03-25.
3. ^ Sears Archives. Sears. Retrieved on 2007-03-25.
4. ^ Mikkelson, Barbara (December 31, 1998). Code Adam (English). Urban
Legends Reference Pages. Retrieved on 2006-08-20.
5. ^ Sears ditches Sears Essentials name
6. ^ [1] Chicago Sun-Times story possible Sears Holding Company targets.
7. ^ [2] Sun-Times speculation of possible Sears/Radio Shack deal
8. ^ Washington Post, Risky Side of Sears: Retailer Is Recast As a Hedge
Fund, As Sales and Stores Decline, Chairman Focuses on Investment, March 11,
2007
9. ^ Sears Grand Fact Sheet
10. ^ This Week in Consumer Electronics, Whirlpool Bears First Fruits Of
Maytag Merger At Home Depot, 10/09/2006
11. ^ 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
12. ^ A surprisingly new style for Sears: Homelife, Sears new power
furniture format, is unlike anything seen before at the nation's largest
retailer
13. ^ HomeLife Furniture closes its doors
14. ^ Sears eyeing South DeKalb as site for new urban store
15. ^ Sears to open urban store.
16. ^ [3] Prairie Stone Business Park, Current Sears headquarters location
and Sears Centre Arena.
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