So, Sears is in big trouble. That’s a shocker.
When I was a child, there were various stores that were ubiquitous in my part of the world.
F.W. Woolworth’s, founded in 1878, was a so-called “Five and Dime,” which was also noted for its lunch counters. In 1962, management decided that it needed to be a superstore, which it named “Woolco.” It died in 1983.
S.S. Kresge was another five and dime; it was founded in 1899, and, also in 1962, its management decided that it too needed to become a big-box superstore, which operated under the name of K-Mart. K-Mart filed for Chapter 11 bankruptcy protection in 2002. When it emerged from bankruptcy, its business geniuses decided that it should purchase another retailer, Sears, in 2004.
Sears & Roebuck was founded in 1892 and after malls became popular in the 1960s, it was often one of the “anchor stores.” Sears had a reputation for not reinvesting in its core business but focusing, instead on shareholder dividends and purchasing or starting other businesses, such as Allstate Insurance, Dean Witter Financial, Coldwell Banker Real Estate, creating the Discover Card, etc.
Today, Sears is showing dismal performance, which it blames on its requirement to pay for the pensions that its retirees earned. My mother worked for K-Mart and with the bankruptcy and merger, she lost her pension, so we’re not talking about every Sears/K-Mart employee, only some.
Incidentally, most of us who get a paycheck have money deducted each payday for Medicare, Social Security, and possibly some type of retirement plan and/or other savings. Shouldn’t Sears have done something similar and invested money over time so that they wouldn’t have to pay pensions out of their operating budget today? However, their priority was shareholder dividends and purchasing other companies. They apparently were neither interested in their future, nor their people.
COincidentally, today retail is shifting to remote purchases that are then delivered to the consumer, usually by US Mail. For many years, Sears was known for its mail order catalog–during my childhood, it wasn’t Christmas without the Sears catalog and its extensive toy section.
By today’s standards the mail order catalog process seems a little slower with sending in an order by mail, but it was the same basic concept. In other words, it’s just possible that if greed were not so huge a factor, Sears could have been Amazon rather than on the verge of collapse.