A once-dominant retail giant has been reduced to just five remaining stores after decades of decline.
Founded in 1886, Sears was once one of America’s biggest retailers, operating 2,700 stores at its peak.
However, years of underinvestment, shrinking sales and controversial business decisions have left the department store chain on the brink of disappearing completely.
The retailer filed for Chapter 11 bankruptcy protection in 2018, a move many analysts saw as the culmination of years of decline.
Neil Saunders, managing director of GlobalData, said at the time: “Today is a day that will live in retail infamy. That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous in equal measure. However, it is not surprising because this is a destination that Sears has been headed towards for many years, with virtually no serious attempt having ever been made to change the trajectory.”
Saunders also questioned whether the company had any realistic path back to profitability.
“Over the longer term, it is still unclear what Sears hopes to accomplish. We believe there is no clear path to success. The group has tried to shrink its way to profitability for years to no avail, so it is hard to see why pursuing the same strategy under the auspices of Chapter 11 would result in a different outcome,” he added.
Many experts trace Sears’ decline back to hedge fund manager Eddie Lampert’s takeover in 2004 and its merger with struggling retailer Kmart a year later.
“The solution to Sears’ problems was to buy another retailer not doing well, and that was Kmart. Then they got a bigger bad business,” Saunders told CNBC. “Sears wasn’t investing or changing, and they started to suffer because of that.”
Over the years, Sears sold off well-known brands including Craftsman, DieHard and Lands’ End in an attempt to raise cash, while creditors later sued Lampert and other investors over asset sales before the company’s bankruptcy. The case was eventually settled.
Today, just five Sears stores remain in operation across the US.
RTM Nexus chief executive Dominick Miserandino said: “The Sears story is one of the biggest cautionary tales in retail history. It’s almost hard to comprehend how many wrong turns a company had to make to go from being America’s most iconic retailer to having only five stores left.”
He added: “The issue wasn’t one bad decision — it was a series of decisions that slowly disconnected Sears from its customers, its employees, and the future of retail. They had the brand, the real estate, the trust, and the history. In the end, it just wasn’t Amazon that killed them but a series of unfortunate events and decisions.”