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Sears, Roebuck and Company is a mid-range chain of international department stores, founded by Richard Sears and Alvah Roebuck. Sears merged with Kmart in early 2005, creating the Sears Holdings Corporation.
The company competes on an average price level on par with J.C. Penney. Sears has also recently rivaled with Belk, Dillard's, and Macy's. However, the company competes below Bloomingdale's, Neiman Marcus, Nordstrom and Saks Fifth Avenue.
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 Minnesota when he received a shipment of watches 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 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.
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 investment 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
Sears issued many catalogs and did not open its first retail store until 1925, when the business was already thirty-two years-old. The first free standing department store was opened on October 5, 1925 in Evansville, Indiana. In addition to mail-order or rail shipment of large purchases, items could also be picked up at the Sears store in a nearby town when retail outlets were opened.
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.
Store brands, diversified services, Allstate insurance, Discover cards
Sears diversified and became a conglomerate during the mid-20th century. It established several major brands of products such as Kenmore, Craftsman, DieHard, 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 short 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 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 upper and lower 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.
Trouble for Sears
Adam Walsh, the son of reporter John Walsh (America's Most Wanted), was abducted from a Sears department store at the Hollywood Mall in Hollywood, Florida, in 1981 at the age of six; his severed head was later found in Vero Beach.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.
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 because the credit cards were draining profits from the company. The remaining card operations were sold to JPMorgan Chase & Company in August, 2005.
In the early 1980s, Sears ceased selling shotguns, which had previously even been sold 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. Sears has also been shouldered with the problem of keeping a sound legal basis for its actions. A number of class action lawsuits have been prepared and successfully won against the company.
In 2003, Sears opened a new off-mall concept brand named Sears Grand. Sears Grand stores carry everything 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 with meat, bakery, deli, frozen foods, dairy, produce and seafood. Sears Grand stores are about 175,000 to 225,000 square feet (15,300 to 19,500 m²). The first Sears Grand and still largest opened at Jordan Landing in West Jordan, Utah in 2003 at 225,000 square feet. In 2006, the company began renovating some Kmart stores and converting them to the Sears Grand format.
Merger with Kmart
In 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.
Sears Tower
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.
External links
"Sears, Roebuck and Company"