Sears, Roebuck and Company

Company type	Subsidiary of Sears Holdings Corporation
Industry	Retail
Founded	1886 (Chicago, Illinois, USA)
Headquarters	Hoffman Estates, Illinois, USA
Products	Clothing, footwear, bedding, furniture, jewelry, beauty products, appliances, housewares, tools, and electronics.
Revenue	$23.6 Billion
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 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 purchase 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 World's 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.^{[citation needed]}

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.

Advertising

• Where America Shops For Value (prior to 1983)
• There's More For Your Life..at Sears (1983–1987)
• Your Money's Worth and a Whole Lot More (1987–1990)
• Your Money's Worth..and More (1990–1991)
• Sears: You Can Count on Me (1991–1995)
• Come See the Softer Side of Sears (1995–1999)
• The Good Life at a Great Price. Guaranteed. (1999-2001)
• Sears: Where Else? (2001–2003)
• Good Life. Great Price. (2003-2007)
• Sears: Where It Begins (2007–Present)^[4]

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.^[5]

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.

In 2005, Sears began adopting certain tactics used by competitors. In October 2005, they imposed a restocking fee of 15% on many of the stores items over $150 and on home-delivered merchandise.

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 m²). 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^[6] 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.^[7] Another potential purchase is Radio Shack since a former Kmart CEO took over as CEO and chaiman.^[8] 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.^[9]

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 m²) ^[10]. 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 was 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 m²).
• 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 m²). 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.^[11] A & E Factory Service is a network of mobile service vans with a long history of performing appliance repairs.^[12]

Former

• Brand Central was an electronics store. The electronics departments in Sears are now known and referred to internally as Brand Central, although they are not marketed to consumers as such.
• 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.
• 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.^[13] 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.^[14]
• 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.^[15][16] The Neighborhood stores closed in the early 2000s.
• Telegames was the brand that Sears used when they purchased the rights to build and sell their own Atari 2600s. These 2600s looked 98% like an actual Atari 2600 and was used like Atari's 2600s.

Sears Tower and Sears Merchandise Building Tower

The original Sears Tower was built in Lawndale on the west side in 1905-1906.

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 notable example being the shift in 1992 from an hourly wage based on longevity, to a base wage (usually $6/hour) and commissions ranging from 1.5% to 4%. This new base wage, often a substantial cut was done in the interest of "to be successful in this highly competitive environment." ^[17]

Sears is one of the few retailers to still pay commission though. They believe that this will create more knowledgeable employees and provide better customer service. Yearly awards are given to the best salesman.

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.^[18]

See also

• Sears Canada
• Sears Mexico

References

External links

• Sears, Roebuck and Company Official Website
• Information about Sears, Roebuck and Company
• The Official History of Sears, Roebuck and Company
• Official website of the Original Sears Tower