Sears, Roebuck and Company

Sears, Roebuck and Co.

Type	Subsidiary of Sears Holdings Corporation
Founded	Chicago, Illinois, U.S. (1886)
Headquarters	Hoffman Estates, Illinois, U.S.
Industry	Retail
Products	Clothing, footwear, bedding, furniture, jewelry, beauty products, appliances, housewares, tools, and electronics.
Revenue	$23.6 Billion
Website	sears.com

Debenture certificate of Sears, Roebuck and Co. from 1976

Sears, Roebuck and Co., commonly known as Sears, is an American mid-range chain of international department stores, founded by Richard Warren Sears and Alvah Roebuck in the late 19th century.

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, a former component of the Dow Jones Industrial Average,^[1] merged with Kmart in early 2005, creating the Sears Holdings Corporation.

History

The exterior of the Sears Merchandise Building Tower.

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 himself, sold the watches for a tidy 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 catalogues. 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 Co.

Mail order catalogue

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 grew quickly. 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)^[2] 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 Co. 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 and the Sears Merchandise Building Tower.^[3]

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.

Retail stores

An older Sears exterior with a newer sign.

The exterior of a typical Sears department store (circa 1997-2007) outside Northgate Mall in Hixson, TN.

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.^[4] The first freestanding retail store opened October 5, 1925 in Evansville, Indiana.^[5] 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.^{[citation needed]}

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.

Store brands

• Allstate - (1926-1995) Automobile parts and insurance ^[6]
• Celestial Star - Diamond Jewelry
• Cheryl Tiegs - (1981-1989) Clothing ^[7]
• Coldspot - (1928-1976) Appliances ^[8]
• Companion - Tools
• Craftsman - (1927-Present) Tools ^[9]
• Craftsman Professional (1995-Present) - Top of the line Sears tools
• Dashmate (1975-2001?) Automobile Radios & Tape players
• David Bradley - (1910-1966) Farm Machinery ^[10]
• DieHard - (1967-Present) Batteries ^[11]
• Dunlap - (19?-19?) Economy line of tools
• Economy - (1902-1947) iceboxes, fountain pens, sewing machine cabinets, gasoline engines, portable saw rigs, variety of farm equipment, cream separator ^[12]
• Gold Bond - (1928-Present) Mens & Boys footwear
• Harmony House - (1940-1968) Interior Decorating Products ^[13]
• Hearthside - (1947-19??) Rug looms & quilting frames
• Hercules - (1908-1965) 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. ^[14]
• Homart (1945-1992) - Heating and Cooling systems, plumbing supplies, electrical supplies, kitchen cabinets, building supplies
• J.C. Higgins - (1908-1964) Sporting Goods ^[15]
• Kenmore - (1927-Present) Appliances ^[16]
• Kromedge - (1955-1991) Sawblades, Dadoes, Moldering Heads, Router Bits
• PENSKE - Automotive testing tools
• Permanex - (1967-Present) Blow-molded Polyethylene Tool Storage Cases, gas cans
• Pilgrim - (1905-1964) Clothing ^[17]
• Roebucks (1949-Present) Clothing ^[18]
• Sears Brand - (1959-2003) Various items from all departments
• Silvertone - (1915-1972) Stereos, Televisions, Musical Instruments ^[19]
• Silvertone Records
• Supertone Records
• Ted Williams Brand - (1961-?) Sporting Goods
• Toughskins - (1971-Present) Clothing ^[20]
• Tower (1948-19??) - Cameras, photo supplies, office equipment

Senior Management Team

W. Bruce Johnson, Interim CEO William C. Crowley, EVP, CAO Scott J. Freidheim, EVP Operating and Support Businesses Kevin R. Holt, EVP Store Operations Michael D. Collins, SVP, CFO

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, 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.

Divestiture

In the 1990s the company began divesting 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 speciality 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 & Co. in August 2005.

Sears Grand

In 2003, Sears opened a new concept store branded 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 square ft) opened at Jordan Landing in West Jordan, Utah in 2003.

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.

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.^[21].

Sears as a hedge fund

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.^[22] 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.^[23]

Subsidiaries

Current

• Sears Department Store is a chain of mid-range 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^[24] in the United States. The largest Sears Department Store is located at the Toronto Eaton Centre.
• 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, plus things like paint, electrical wiring, water heaters, tractor-mowers, bug zappers, thermostats, etc., generally things you would find in hardware stores, but its all Sears' brands. 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 department stores typically located away from shopping malls. They carry everything a Sears Full-Line store 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 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) ^{[25][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 department stores that are common retrofit remodels of existing Kmart stores. Their product lines are similar to that of Sears Grand stores. Current locations include: East Ridge, TN, Bethlehem, PA and Lakeland, FL.
• Sears Appliance & Hardware, formerly Sears 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 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 Authorized Retail Dealer Store is a chain of small Sears retail stores that are operated as "authorized retailers" of Sears merchandise, owners of the dealer stores do not own the merchandise, merely sell it to the public for a commission, which has been cut in recent years. The owners and employees in these stores are not considered Sears' employees, and receive no benefits from Sears. There has been an attempt to unionize the dealers in recent years, by the Dealer Store council, an entity consisting of dealer store owners, but which has no official power. The attempts at unionization have not proven successful. These stores are usually located in smaller markets that do not currently support full-sized retail stores. They are signed as Sears and are usually free-standing or located in strip malls. They primarily concentrate on hardware, appliances, lawn and garden supplies, and some major electronics (televisions, home theater systems, etc...).
• 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 Parts & Repair Center 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. 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 decor stores that carry high end home appliances, bedding, and kitchen and bath fixtures. The Great Indoors stores are 130,000 square feet (12,000 m²) on average.^{[citation needed]}
• 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 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 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.^[26] A & E Factory Service is a network of mobile service vans with a long history of performing appliance repairs.^[27]
• Kmart a discount department store which was founded in 1962. After years of decline in revenue to Target and Walmart, it went bankrupt in 2002. Then after a fast turnaround, it bought Sears in 2004. Their parent Kmart Holding Cooperation was renamed Sears Holding Cooperation. Kmart fully merged into Sears in 2005.

Former

Sears Essentials former logo

• Sears 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, 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.^[28] 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.^[29] 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. An average Sears Neighborhood store was 6,800 square feet (630 m²). These stores were also independently owned and operated. The concept was introduced in Atlanta in 1998, and another similar store was located in Cincinnati.^[30][31] The Neighborhood stores closed in the early 2000s.

Employee relations

Sears building in Mexico City located 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 in the interest of "to be successful in this highly competitive environment." Sears has also been accused of being unfair to employees. The company encourages customers to shop online via Sears.com after their commissioned employees work hard showing them different products in the store. This results in customers receiving excellent customer service, Sears saving revenue by not having to pay commissions by selling products on Sears.com, and employees working basically for free in the appliances, vacuums, and mattresses departments. ^[32]

Sears is one of few retailers to still pay commission, in the belief that this will create more knowledgeable employees and provide better customer service. However, 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. 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. Compensation for hourly employees is currently at federal minimum wage ($6.25 $7.27 in July 2009).

This section requires expansion.

The domain sears.com attracted at least 115 million visitors annually by 2008 according to a Compete.com survey.

Properties

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 Towers in Kuala Lumpur in 1996.

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 of 2009 London-based insurer Willis Group Holdings, Ltd., purchased the building's naming rights and announced plans to make a switch later that year.^[33]

New headquarters

Sears saw a modern suburban office campus as a more efficient location than the Sears Tower in downtown Chicago, so they began the move 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.^[34]

Sears Center 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.^[35]

See also

• Sears Canada
• Sears Mexico
• Sears plc, former U.K. company

References

External links

• Avenue Queue: One long wait inspired career shift MIT News February 6, 2008
• Information about Sears, Roebuck and Co.
• Official website of the Original Sears Tower
• Sears, Roebuck and Co. Official Website
• The Official History of Sears, Roebuck and Co.

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