To appreciate the rise and fall of Sears, the retail giant that filed for bankruptcy on Monday, consider a 19th-century pocket watch.
To most modern shoppers, a pocket watch is boring. It’s an unfashionable, potentially broken piece of gerontic jewelry. But to others, it’s not merely an artifact. It’s an achievement: a silent symphony of mite-size screws, whirling in uncanny harmony.
So it is with Sears. Today’s consumers look upon the retailer with disdain, if they look upon it at all. In the past five years, the company has lost almost $6 billion and closed more than 1,000 stores. Not all bankruptcies are fatal, but the reporting around Sears’s filing seems rather funereal. Sunk deep into debt by its hedge-fund owners, Sears is almost certainly a goner.
But anything that lasts 132 years, as Sears has, deserves a proper eulogy. You don’t live longer than any human in history without getting a few things right.
The story of Sears begins with pocket watches. In the early 1880s, a railway agent named Richard Warren Sears came into possession of a discarded box of watches left over from a local store. He sold them to other railroad agents at a nice profit. There was an idea: Sell other people’s stuff.
Enlisting the help of a watch repairman named Alvah C. Roebuck, Sears opened a mail-order business in Chicago—Sears, Roebuck. The idea was to mail catalogs to Americans, using the U.S. post office’s guaranteed delivery to rural areas. At first, the catalog focused on his-and-hers jewelry, like watches and necklaces. Within 10 years, the book bloomed to more than 500 pages. Before long, the so-called Consumer’s Bible read like an index of the entire U.S. economy. The company sold dolls and dresses, cocaine and tombstones, and even build-it-yourself houses. Decades before technology analysts started talking about platforms, Sears was the OG platform technology.
But Sears’s greatest act was yet to come. In the 1920s, Americans were streaming from farms into major cities and suburbs. Sears chased them with storefronts. In early 1925, there were exactly zero Sears stores in the United States. By 1929, there were 300. Soon there were thousands. As shoppers came to rely on Sears for car parts in an increasingly mobile economy, the company created a new division to sell auto insurance alongside the car struts. Thus, the Sears mothership gave birth to Allstate. It eventually absorbed a real-estate company and a brokerage firm. At one point in the middle of the century, Sears reportedly accounted for one in every 100 dollars spent in the United States.
The tragic irony of the Sears saga is that communications technology, marshaled so brilliantly during Sears’s rise, was instrumental in the company’s downfall. In the 1980s, Walmart and other more modern retailers used new digital technology to understand what shoppers were buying and to relay those findings to Walmart headquarters, which could place bulk orders for the new best-selling brands and products. With Walmart playing a superior game of sell-cheap-stuff-efficiently, Sears’s fall was swift. In the early 1980s, it was five times as big as Walmart, by total revenue. By the early 1990s, Walmart was twice as big as Sears.
Today there is another ascendant retailer that initially grew famous for selling one product; whose virtual-shopping business is now experimenting with physical locations; and that has grown to became an American Goliath that seems to have its hand in nearly every conceivable business sector. It’s Amazon. Jeff Bezos’s everything store is, in so many ways, the Sears that Sears could have been. Starting with its catalog business, Sears built a vehicle for surveilling American consumer tastes. But in the past few decades, Walmart and Amazon built better tools for observing and anticipating shopping habits and tastes.
The end of Sears is sad for the malls, shoppers, and workers that still rely on the company for car parts and health care. But nothing lasts forever. And nothing should. At 132 years old, Sears has been around longer than the four most valuable companies in the world—Apple, Amazon, Microsoft, and Alphabet—combined. Sears is not a failure. It’s a broken pocket watch—an extraordinary achievement to be remembered, even after it’s stopped working.