Sears

Sears, Roebuck and Co. ( ), commonly known as Sears, is an American chain of department stores founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosenwald, with what began as a mail ordering catalog company migrating to opening retail locations in 1925, the first in Chicago. In 2005, the company was bought by the management of the American big box discount chain Kmart, which upon completion of the merger, formed Sears Holdings. Through the 1980s, Sears was the largest retailer in the United States. In 2018, it was the 31st-largest. After several years of declining sales, Sears's parent company filed for Chapter 11 bankruptcy on October 15, 2018. It announced on January 16, 2019, that it had won its bankruptcy auction, and that a reduced number of 425 stores would remain open, including 223 Sears stores.

Sears was based in the Sears Tower in Chicago from 1973 until 1995, and is currently headquartered in Hoffman Estates, Illinois. Sears announced in 2021 that it would be selling its Hoffman Estates headquarters complex.

History

Beginnings

Richard Warren Sears was born in 1863 in Stewartville, Minnesota to a wealthy family which moved to nearby Spring Valley.Richard Sears
, Spring Valley Methodist Church Museum, Accessed January 17, 2011. In 1879, his father died shortly after losing the family fortune in a speculative stock deal. Sears moved across the state to work as a railroad station agent in North Redwood, then Minneapolis.

While he was in North Redwood, a jeweler refused delivery on a shipment of watches. Sears purchased them and sold them at a low price to the station agents, making a profit. He started a mail-order watch business in Minneapolis in 1886, calling it the R.W. Sears Watch Company. That year, he met Alvah Curtis Roebuck, a watch repairman. In 1887, Sears and Roebuck relocated the business to Chicago, and the company published Richard Sears's first mail-order catalog, offering watches, diamonds, and jewelry.

In 1889, Sears sold his business for $100,000 ($3 million in 2021 dollars) and relocated to Iowa, planning to be a rural banker. He returned to Chicago in 1892 and established a new mail-order firm, again selling watches and jewelry, with Roebuck as his partner, operating as the A. C. Roebuck watch company. In 1893, they renamed the company Sears, Roebuck, and Co. and began to diversify the product lines offered in their catalogs.

Before the Sears catalog, farmers near small rural towns usually purchased supplies, often at high prices and on credit, from local general stores with narrow selections of goods. Prices were negotiated and relied on the storekeeper's estimate of a customer's creditworthiness. Sears built an opposite business model by offering in their catalogs a larger selection of products at published prices.

By 1894, the Sears catalog had grown to 322 pages, including many new items, such as sewing machines, bicycles, sporting goods and automobiles (later produced, from 1905 to 1915, by Lincoln Motor Car Works of Chicago Ford line">Lincoln_(automobile).html" ;"title="o relation to the current Lincoln (automobile)">Ford line. By 1895, the company was producing a 532-page catalog. Sales were over $400,000 ($12 million in 2021 dollars) in 1893 and over $750,000 ($20 million in 2021 dollars) two years later. By 1896, dolls, stoves, and groceries were added to the catalog.

Despite the strong and growing sales, the national Panic of 1893 led to a full-scale recession, causing a cash squeeze and large quantities of unsold merchandise by 1895. Roebuck decided to quit, returning later 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 $75,000 ($ million today), and that month the company was reincorporated in Illinois with a capital stock of $150,000 ($ million today). The transaction was handled by Albert Henry Loeb of Chicago law firm Loeb & Adler (now Arnstein & Lehr); copies of the transaction are still displayed on the firm's walls.

Early 20th century

Sears and Rosenwald got along well with each other, but not with Nusbaum; they bought his interest in the firm for $1.3 million in 1903 ($ million today). 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.

Sales continued to proliferate, and the prosperity of the company and their vision for more significant expansion led Sears and Rosenwald to take the company public in 1906, with a stock placement of $40 million ($ billion today). They had to incorporate a new company to bring the operation public; Sears and Rosenwald established Sears, Roebuck and Company with the legal name Sears, Roebuck and Co., in the state of New York, which effectively replaced the original company. The current company inherits the history of the old company, celebrating the original 1892 incorporation, rather than the 1906 revision, as the start of the company.

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. The company traded under the ticker symbol S and was a component of the Dow Jones Industrial Average from 1924 to 1999.

In 1906, Sears opened its catalog plant and the Sears Merchandise Building Tower in Chicago's West Side. The building was the anchor of what would become the massive Sears, Roebuck and Company Complex of offices, laboratories, and mail-order operations at Homan Avenue and Arthington Street. The complex served as corporate headquarters until 1973 when the Sears Tower was completed and served as the base of the mail-order catalog business until 1995.

By 1907, under Rosenwald's leadership as vice president and treasurer, annual sales of the company climbed to roughly $50 million ($ billion today). Sears resigned from the presidency in 1908 due to declining health, with Rosenwald named president and chairman of the board and taking on full control.

In 1910, Sears acquired the David Bradley Plow company. This acquisition would lead to the manufacturing of riding mowers, chainsaws, tillers, etc., in the Bradley Illinois factory.

The company was badly hurt during 1919–21 as a severe depression hit the nation's farms after farmers had over-expanded their holdings. To bail out the company, Rosenwald pledged $21 million ($ million today) of his personal wealth in 1921. By 1922, Sears regained financial stability.

Boom years

Brick and mortar

Rosenwald decided to shift emphasis to urban America and brought in Robert E. Wood to take charge.
Rosenwald oversaw the design and construction of the firm's first department store, built on land within the Sears, Roebuck, and Company Complex. The store opened in 1925. In 1924, Rosenwald resigned the presidency but remained as chair until he died in 1932; his goal was to devote more time to philanthropy.

The first store opened on February 2, 1925, as an experiment in the North Lawndale Sears, Roebuck and Company Complex. Despite its remote location on the outskirts of Chicago, its success led to dozens of further openings across the country, many in conjunction with the company's mail-order offices, typically in lower-middle-class and working-class neighborhoods, far from the main downtown shopping district. This was considered highly unconventional at a time when shopping was concentrated in city centers, but through World War II, there was an extensive streetcar network in Chicago and other US cities. However, rapidly increasing car ownership and the brand's huge popularity helped attract customers.

Sears retail stores were pioneering and broke the conventions of the time in three ways: their location away from central shopping districts, innovative store design, and unconventional product mix and retailing practices. Many stores at this time were designed by architect George C. Nimmons and his firms. The architecture was driven by merchandising needs rather than the desired outer appearance. This made the stores excellent examples of the modern architecture of the time – styles made famous by Bertram Goodhue and Eliel Saarinen.

Its stores were oriented to motorists. Set apart from existing business districts amid residential areas occupied by their target audience, they had ample, free, off-street parking and communicated a clear corporate identity. In the 1930s, the company designed fully air-conditioned, "windowless" stores, such as Sears-Pico in 1939 in Los Angeles, which was the first to have an open plan selling floor (instead of breaking up the floor into discrete sections).

Sears was also a pioneer in creating department stores that catered to men and women. The stores included hardware and building materials. It de-emphasized the latest clothing fashions in favor of practical and durable clothing and allowed customers to select goods without the aid of a clerk.

In 1933, Sears issued the first of its Christmas catalogs known as the "Sears Wishbook", a catalog featuring toys and gifts, separate from the annual Christmas Catalog. From 1908 to 1940, it included ready-to-assemble Sears Catalog Home kit houses.

Sears opened its first store in Mexico City