Sears, officially named Sears, Roebuck and Co., is an American chain of department stores which was founded by Richard Warren Sears and Alvah Curtis Roebuck in the late 19th century. Formerly a component of the Dow Jones Industrial Average, Sears[2] merged with Kmart in early 2005, creating the Sears Holdings Corporation.

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.



[edit] History

Richard Sears

Richard Warren Sears was a railroad station agent in North Redwood, Minnesota when he received an impressive shipment of watches from a Chicago jeweler which were unwanted by a local jeweler. Sears purchased them, then sold the watches for a considerable profit to other station agents, 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 name became Sears, Roebuck and Co.

[edit] 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 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 grew quickly.

The first Sears catalog was published in 1888. By 1894, the Sears catalog had grown to 322 pages, featuring sewing machines, bicycles, sporting goods, automobiles (produced from 1905–1915 by Lincoln Motor Car Works of Chicago, not related to the current Ford Motor Company brand of the same name)[3] 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 resigned soon after due to ill health, but the company retained his name. By the following year, dolls, refrigerators, stoves and groceries had been added to the catalog.

Sears, Roebuck and Company catalog, 1918

Sears, Roebuck and Co. soon developed a reputation for quality products and customer satisfaction. By 1895, the company was producing a 532-page catalog with the largest variety of items that anybody at the time could have thought of. Sales were greater than $400,000 in 1893 and more than $750,000 two years later.[4]

In 1906 Sears opened its catalog plant and the Sears Merchandise Building Tower.[5] Also, by that time, the Sears catalog had become known in the industry as "the Consumers' Bible". In 1933, Sears, Roebuck and Co. produced the first of its famous Christmas catalogs known as the "Sears Wishbook", a catalog featuring toys and gifts, separate from the annual Christmas Catalog. 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.[6][7]

Alvah Roebuck returned to the organization during the Great Depression, and worked as a spokesperson until his death in 1948. 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.

[edit] 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.[8] The first freestanding retail store opened October 5, 1925 in Evansville, Indiana.[9] 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.

From the 1920s to the 1950s, Sears built many urban department stores. Starting in the 1950s, the company expanded into suburban markets, and malls in the 1960s and 1970s. In 1959, it had formed the Homart Development Company for developing malls. Many of the company's stores have undergone major renovations or replacement since the 1980s. The company was the largest retailer in the US until the early 1980s, but had dropped significantly in rankings by the time it merged with Kmart.

[edit] Shop Your Way Rewards

Shop Your Way Rewards is the rewards program of all the Sears Holding Brands. It was started by Kmart as Kmart Smart Rewards as a pilot program. One year after the Smart Rewards Program was started the name and program was changed to Shop Your Way Rewards. During the test part of the program it was limited to certain Sears and Kmart stores. After the test of the program was considered a success by Sears marketing team, it was introduced to all Sears Holding Brands including Sears, The Great Indoors, Sears Grand, Kmart, Lands End, and My Gofer. The program has four tiers. The tiers are Member, VIP Silver, VIP Gold, VIP Platinum, and VIP Executive. To reach the VIP levels of the program customers must meet a certain spending qualification criteria. Potential members may enroll in the rewards program at any Sears Holdings run outlet or online. Shopyourway Rewards has since replaced the former Craftsman Club Rewards program.

[edit] Diversification

Sears began to diversify in the 1930s, adding Allstate Insurance Company in 1931 and placing Allstate representatives in its stores in 1934. Over the decades it established major national brands, such as Kenmore, Craftsman, DieHard, Silvertone, Supertone, and Toughskins. The company became a conglomerate during the mid-20th century, adding Dean Witter and Coldwell Banker real estate in 1981, starting Prodigy as a joint venture with IBM in 1984, and introducing the Discover credit card in 1985. In March 2009, Sears purchased the social search engine Delver.

[edit] Divestiture and Sears Grand

In the 1990s the company began divesting itself of many non-retail entities, which were detrimental to the company's bottom line. Sears spun off its financial services arm which included brokerage business Dean Witter Reynolds and Discover Card. It sold its mall building subsidiary Homart to General Growth Properties in 1995.[10] Sears later acquired hardware chain Orchard Supply Hardware in 1996 and started home improvement store The Great Indoors in 1997.

In 1993, Sears stopped production of its general merchandise catalog because of sinking sales and profits. Sears Holdings continues to produce specialty catalogs and reintroduced a smaller version of the Holiday Wish Book in 2007.

In 2003, Sears sold its retail credit card operation to Citibank. The remaining card operations were sold to JPMorgan Chase in August 2005.

In 2003, Sears opened a new concept store called 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 an edited assortment 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 sq ft) opened at Jordan Landing in West Jordan, Utah in 2003.

[edit] Merger with Kmart

A Sears Essentials that was formerly a Kmart in West Palm Beach, Florida

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.

In 2005, the company began renovating some Kmart stores and converting them to the Sears Essentials format, only to change them later to Sears Grands.[11]

[edit] Sears as a hedge fund

It has been speculated that Sears management is interested in more purchases beyond the Kmart takeover of Sears and that investor Edward Lampert is interested in the company becoming an investment company more than a retailer. Some of many possible targets are other companies that the management believes have low stock prices relative to company value. Some mentioned are Safeway, The Home Depot, and Anheuser–Busch.[12] 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". A third of pre-tax income in the third quarter of 2006 was generated by financial trades, followed by a poor fourth quarter in same.[13]

[edit] Subsidiaries

Sears department store
Sears inside a shopping mall in Puerto Rico

[edit] Current

  • Sears Department Store is a chain of department stores that are located in shopping malls; they carry clothing, jewelry, home 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 926 full-size Sears stores[14] in the United States. There are also 301 Sears locations in Canada and 66 in Mexico.[15] The largest Sears Department Store is located at the Toronto Eaton Centre in Canada.
  • Sears Hardware Stores are chains of small hardware stores usually located in small towns that are far away from a larger Sears department store. They carry Sears' complete line of Craftsman tools. Sears Hardware Stores also carry other items one would find in hardware stores (such as paint, electrical wiring, water heaters, and tractor-mowers), but under Sears branding. Many of these "Hardware" stores have been changed over to Sears Appliance & Hardware Stores, but there are still many of the original ones left, usually in smaller markets.
  • Sears Grand is a chain of hypermarkets typically located away from shopping malls (with the exception of Gurnee Mills, Gurnee, Illinois). Many Sears Grand locations are retrofit remodels of existing Kmart supercenter stores. They carry everything a Sears department store carries, plus health and beauty products, a pharmacy, toys, baby care, cleaning supplies, home décor, pet food, cards and party supplies, books, magazines, music, Little Caesars Pizza Station, movies, and a selection of groceries which is limited mostly to dry goods. Sears Grand stores range from 165,000 to 210,000 square feet (15,300 to 19,500 m²).[16][broken citation] The first Sears Grand opened at Jordan Landing in West Jordan, Utah in 2003. At 225,000 square feet (20,900 m2), the Jordan Landing store is currently the largest in the chain.
  • Sears Essentials is a chain of discount stores that are common retrofit remodels of existing Kmart stores. Their product lines are similar to that of Sears Grand stores. Current locations include: Elmhurst, IL (reverting to a Kmart), East Ridge, TN (now closed from a recent flood), Bethlehem, PA, Lakeland, FL, West Palm Beach, FL, San Clemente, CA, Corona, CA, San Diego, CA, Tewksbury, MA, and Peoria, AZ.
  • Sears Appliance & Hardware is a chain of hardware stores that carry the whole line of Sears hardware and are usually free-standing. More than 110 Sears Appliance & Hardware stores averaging 40,000 square feet (3,700 m2) serve customers nationwide. Stores were expanded to include Sears' full line of appliances in 2005.
  • Sears Optical is a chain of off-mall optical shops which carries all the same products and services as the optical department at regular Sears stores.
  • Sears Hometown Stores(formerly known as Sears Authorized Dealer Stores) is part of the retail operation of Sears Holdings Corporation and is a small store version of Sears full-line department stores. Sears Hometown Stores, established in 1993, is a franchise formula and Sears Home Appliance Showroom, established in 2007, offers primarily appliances. The stores are located away from shopping malls and serve local communities across the United States and Puerto Rico.[17]
  • Sears Outlet is an outlet version of Sears department stores located in various retail locations across the United States. The stores carry new, one-of-a-kind, out of carton, discontinued, used, scratched and dented merchandise at 20–60% off regular retail price. While a wide variety of products are available, appliances make up a large majority of available merchandise. Sears Outlet stores were once known as Sears Surplus.
  • Sears Parts & Repair Center, also known as Sears Service Center and Sears Home Central, is a chain of service centers that typically sell parts for lawn & garden equipment and appliances and also feature a carry-in point for customers to bring-in merchandise which needs to be repaired, either in or out of warranty. Sears has started closing many of these as more of its service and repair business is home-based.
  • The Great Indoors is a chain of free-standing home decor stores that carry high-end home appliances, bedding, and kitchen and bath fixtures. The Great Indoors also offers custom kitchen and bathroom design services. The Great Indoors stores are 130,000 square feet (12,000 m²) on average.[citation needed]
  • Lands' End, aside from supplying its clothing line to Sears stores, also has 16 stores operated by Sears Holdings that carry only Lands' End clothing. These stores are located in outlet malls and regular malls.
  • Orchard Supply Hardware 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 88 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 Service is the newest name for Sears' longstanding on-site repair service, servicing larger items such as home appliances, electronics, and garden equipment. The A&E brand name was purchased from Montgomery Ward, which used it for their home service unit, and is a joint venture held by Whirlpool and Sears Holdings.[18] A&E Factory Service is a network of mobile service vans with a long history of performing appliance repairs.[19]

[edit] Former

  • National Tire and Battery & National Tire Warehouse (NTW) (NTB) is an American brand of auto service centers. It was formerly owned by Sears until it was spun off in 2003. Sears created the brand in 1997 by consolidating the Tire America (TA) and National Tire Warehouse (NTW) brands, adding the "B" to include its DieHard brand of batteries.[20] Sears sold the brand, which consisted mostly of stores set apart from its name brand stores, in 2003 to TBC Corporation. A Sears spokesman said "Because of the separate branding and the lack of proximity to our retail operations, we weren't able to drive growth like a TBC could".[21] The chain of 226 stores was reported to have brought in $425 million in revenue and $60 million in profit in 2002.[21]
  • Sears Brand Central was an electronics store. The appliances departments in Sears are now known and referred to internally as Brand Central, although they are not marketed to consumers as such, except for a few locations in Puerto Rico.
  • Sears Catalog Sales 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 Authorized Catalog Sales Merchant was an independent business person who provided many of the same services as the Sears Catalog Sales Store.
  • Sears Appliance Stores were small stores that displayed and sold (at Retail Store prices) appliances, carpeting, etc. and, in addition, provided a catalog sales department through which catalog items could be ordered.
  • Sears Rent-a-Car was a car rental chain formed in a joint venture with Budget. It was sold to Avis in 2002.
  • 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.[22] 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.[23] In Puerto Rico, a few HomeLife locations are still present.
  • Sears Neighborhood was a chain similar to Sears Hometown stores, except that Neighborhood stores were located in urban markets. These stores were also independently owned and operated. The concept was introduced in Atlanta in 1998, and another similar store was located in Cincinnati.[24][25] The Neighborhood stores closed in the early 2000s.

[edit] Past and present store brands

The exterior of the Sears Merchandise Building Tower.
  • Allstate – Automobile parts and insurance[26]
  • Celestial Star – Diamond Jewelry
  • Challenge Records
  • Cheryl Tiegs – Clothing[27]
  • Coldspot – Appliances, refrigerators[28]
  • Companion – Tools
  • Conqueror Records
  • Covington - Clothing
  • Craftsman – Tools[29]
  • Craftsman Professional – Top of the line Sears tools
  • Dashmate Automobile Radios & Tape players
  • David Bradley – Farm Machinery[30]
  • Dean Witter Reynolds - financial service, brokerage
  • Diehard – Batteries[31]
  • Discover – Credit card
  • Dunlap – Economy line of tools
  • Easy Living – Interior paint, primers, and painting accessories. (DISCONTINUED IN MAIN LINE STORES-AVAILABLE ONLY AT KMART IN PREMIXED FORM)
  • Economy – iceboxes, fountain pens, sewing machine cabinets, gasoline engines, portable saw rigs, variety of farm equipment, cream separator[32]
  • Evolv – A do it yourself line of tools marketed with eco friendly green packaging[33]
  • Gold Bond – Mens & Boys footwear
  • Goolagong - clothing
  • Harmony House – Interior Decorating Products[34]
  • Hearthside – Rug looms & quilting frames
  • Hercules – work clothing, appliances, insurance (Hercules Life Insurance Company, owned by Sears), sewage systems, letterman's jackets, fire extinguishers, heavy-duty coveralls, and home heating systems.[35]
  • Homart – Heating and Cooling systems, plumbing supplies, electrical supplies, kitchen cabinets, building supplies
  • J. C. Higgins – Sporting Goods, camping[36]
  • Kenmore – Appliances[37]
  • Kromedge – Sawblades, Dadoes, Moldering Heads, Router Bits
  • Penske – Automotive testing tools
  • Permanex – Blow-molded Polyethylene Tool Storage Cases, gas cans
  • Pilgrim – Clothing[38]
  • Roebucks – Clothing[39]
  • Sears Brand – Various items from all departments
  • Sears Video Arcade - Sears's own version of Atari in the early 1980s; discontinued in favor of the actual Atari systems
  • Silvertone – Stereos, Televisions, Musical Instruments[40]
  • Silvertone Records
  • Supertone Records
  • Ted Williams Brand – Sporting Goods
  • Toughskins – Clothing[41]
  • Tower – Cameras, photo supplies, office equipment
  • Weatherbeater – Exterior paint, primers, and accessories. (DISCONTINUED AT MAIN LINE STORES)

[edit] Employee relations

Sears building in the Edificio La Nacional building in Mexico City, across from the Palacio de Bellas Artes.

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 anywhere from $3.50 to $6 per hour) and commissions ranging from 1% to 11%. This new base wage, often constituting a substantial (up to 40%) cut in pay, was done "to be successful in this highly competitive environment."[42]

In early October 2007 Sears cut commission rates for employees in select departments to anywhere from 1% to 4% but equalized the base wage across all Home Improvement and Electronics departments. This cut was furthered in late 2009 to a 1% commission rate on selected "base items" in the electronics departments of Stores. Appliances, vacuums, and mattresses are the only departments left where wages are based solely on commission sales. The jewelry department associates receive a low base salary with 1% commission on their sales. This model does not apply to all stores. Many stores now simply pay an hourly wage in the fine jewelry department, with no sales-based commission. In early 2008 Sears also converted Lands' End from commission to a straight hourly wage. Stores that feature a 'Lands' End Shop' are based on an hourly wage and a 3% commission on all catalog/internet sales placed from within their store. Associates receive an associate discount. 20% off on clothing, shoes, and jewelry. They also receive 10% off on everything else in the store, including Great Price items. Any associate orders done through the Lands' End Internal site receive 30% off with the associates paying a $6 fee for shipping and handling of any size order.

The domain sears.com attracted at least 240 million visitors annually by 2011 according to a Compete.com survey. Sears saw profits drop 13% during the fourth quarter of 2010 but still has total assets of $26.05 billion as of the first quarter of 2011.[43]

[edit] Properties

[edit] Sears Tower

Sears Tower

Sears made history in 1974 when it completed the 110-story Sears Tower in Chicago. The tower became the world's tallest building upon its completion, a title it held until the completion of the Petronas Twin Towers in Kuala Lumpur in 1996. It remains the tallest building in the United States.

Seeking to spread its operations out in a business park, Sears left in 1993 and subsequently sold the tower, moving to Hoffman Estates, Illinois. Even though its naming rights to the building expired in 2003 it remained the Sears Tower through early 2009. In March 2009 London-based insurer Willis Group Holdings, Ltd., purchased the building's naming rights and announced plans to make a name change later that year. The official renaming as the Willis Tower took place on Thursday, July 16, 2009, during a public ceremony hosted by Willis Group Holdings.[44]

[edit] New headquarters

Sears moved to the new Prairie Stone Business Park in Hoffman Estates, Illinois between 1993 and 1995. The office park has a focus on technology and sustainability, featuring an extensive landscaping plan that uses native prairie plants wherever possible, and a system of several express bus routes coordinated with Pace to encourage public transportation use with a future stop on the Metra STAR Line.[45] Despite these services, the remote location of Prairie Stone means that it is much less well served by public transportation than the centrally-located Sears Tower.

[edit] Sears Centre Arena

Recently opened is the 25% Sears owned Sears Centre Arena. Ryan Companies owns the remaining 75%, and other offices and hotels are being developed on the Prairie Stone campus.[46]

Author:Bling King
Published:Sep 24th 2011
Modified:Jan 10th 2012

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