Sears Holdings Is A Company in Crisis

Sears Holdings Is A Company in Crisis

According to recent financial news, Sears Holdings is "a company in crisis." The company has closed hundreds of its stores, both Sears and K Mart, in recent years and has been selling some of its most profitable stores to raise money.

If you grew up in the electronic age, when most of the things needed could be purchased online from Amazon, you should know that Sears, Roebuck & Co. and its catalog ushered in a whole new era in America — especially for those who lived on farms or in small towns throughout the country. You could buy virtually everything you needed from that catalog at prices that met almost everyone's pocketbook. In later years you could even buy an automobile or kits to construct a building or a church.

It all began in 1886 when Richard Sears bought a shipment of unwanted gold watches, which he sold at retail. Later, with Alvah Roebuck, he started Sears, Roebuck & Co. and in 1888 produced their first catalog in competition with Montgomery Ward's "Wish Book." By 1895 the Sears catalog had more than 500 pages and sold almost every consumer product a working-class American family could desire at clearly stated prices.

Sears adapted well to growth of the suburbs after World War II with stores in major cities throughout the country. It completely dominated the American retail scene, with its Kenmore appliances and Craftsman tools, but trouble lay ahead in the growth of discount stores nationwide.

In November 2004, Sears merged with discount store-operator K Mart in an $11 billion deal they hoped would help them compete in the changing American retail field. The new company, Sears Holdings, which operates both Sears and K Mart stores, was then the third-largest retailer in the country with about 3,500 retail outlets.

Like Sears, K Mart had its start in the 19th century when Sebastian Spering Kresge, J.G. McCrory and Charles J. Wilson (Kresge's brother-in-law) opened the first S.S. Kresge dime store in Detroit in 1899. The store was 2,000 square feet in size, had 18 employees and sold 1,500 items — none costing more than ten cents.

S.S. Kresge became one of America's top three variety store chains and reached its peak in 1935 with 745 units located primarily in the midwest and eastern United States. Most of the stores featured snack bars or luncheonettes. In 1962, to offset declining profits, increased labor costs and too many urban locations, the company opened its first K-mart discount store, which eventually expanded across the country. The last Kresge variety store was sold to the McCrory Corporation in 1987.

What will be the fate of Sears Holdings is anyone's guess, but for many people the demise of the Sears and K Mart brands will signal the passing of two great American companies that played a major role in the growth of this country and the retail industry.