Sears's Mysterious Side

Not very long ago, Sears was the dominant force in the retail industry. Grandpa would go to Sears if he needed a washing machine. If Mom wasn't too particular about what she wore, she may take advantage of Sears' gentler side. Dad might go there if he needed some equipment to work on that '68 Camaro he's kept in the garage for the last 15 years.

Sears Holdings had about 3,500 locations in 2005. There are nine left today. Many people who have long believed the firm was no longer in existence as a physical retail presence are surprised that any still exist at all. Transformco, the firm running these shops in 2024, has not disclosed its plans. Is the running of these outdated sites really a means to a lucrative real estate end, or is Sears attempting to make a return as some claim?

A historical journey through Whittier

I went into a Sears full-line shop in Whittier, California, in March 2024. The four-story old Broadway building, now known as Sears since 1996, was surrounded by fluffy white clouds on a brilliant, bright blue day.

Other than my love of history and my obsession with underdogs, I'm not really sure how I came to be enamored with Sears; however, here I was, ready to go through the door and into the late 1990s.

The air inside was calm, and it smelled of dust and starch. Contrary to what I had heard at other places, it wasn't moldy or nasty. Except for a few staff members and a few customers, the sales floor was almost deserted.

The check stand area, with its 2018 warranty information, stood in the middle. There was no one on the second floor. The automatic safety warning that was coming on the escalator was not working. There were trousers and bikinis for sale on the ground level. The arrival of a new appliance for sale was a major event in the appliance area. I believe it was a dryer.

A staffer said, "New merchandise will be arriving soon." I hope she wasn't too optimistic. Early in March, a Sears in Palm Beach Gardens, Florida, abruptly shuttered without informing either employees or customers.

I stood in the shop, admiring the scenery, reading the posters urging me to "Rediscover Sears," and marveling that such a powerful firm had devolved to the extent where a single new appliance was a major event, as I always did on visits.

How did this occur? Why do eleven shops continue to operate with no distribution centers and with what seems to be little corporate support? There are a lot of questions for the inquisitive mind.

An overview of the past

Things weren't always like this. Once a proud enterprise, Sears was a national institution and the number one retailer in the US. Selling used timepieces at a train station was how Richard Warren Sears got his start in 1886. With the assistance of Alvah Roebuck, the money man who concentrated on paying the bills while Sears continued to hustle, he was able to turn his side activity into a sizable company. He liked selling.

The Sears archives include a thorough record of the long history. In 1893, Sears invented the catalog industry, giving rural consumers their own sluggish version of Amazon.

Through the huge book, you could order almost anything from Sears, including homes, vehicles, and firearms. Several of such kit-built homes still stand today.

The company's success led to the construction of the world's tallest structure at the time, the Sears Tower in Chicago. According to the archives, "When the 110-story Sears Tower opened in 1973, it became the tallest structure in the world at 1,454 feet." 76,000 tons of steel, 2 million cubic feet of concrete, 16,000 tinted windows, 1,500 miles of electrical wire, and 80 miles of elevator cable were among the astounding quantities of resources used to create the structure.

This was no little business; until 1991, it was the number one retailer in America. However, Walmart, a distinctly lower-tier rival, overtook it.

Under the direction of hedge investor Eddie Lampert, Kmart acquired Sears in 2005. This came after Sears had been in decline for years and had lost focus by concentrating on practically everything other than its strongest line, which is hard lines, also known as tools and appliances.

An unsuccessful effort to promote clothing via the "Softer Side of Sears" campaign was eventually unsuccessful because the buying department was unable to fulfill the marketing team's promises. Because its mall sites were just less handy than those of Walmart and Target, Sears has long been burdened by them.

Given that the majority of Kmart's stores were off-mall and in strip malls and power centers around the nation, Sears should have had an edge in the merger. Many refer to him as "Fast Eddie," and he was prepared to share the word about "integrated retail." Employees quickly discovered that members may shop both in-person and online; don't call them customers unless you want to be shouted at over a teleconference.

It made perfect sense on paper. But Lampert wasn't a specialist in retail. He had used his strategies to make money with AutoZone, but Sears is not AutoZone, and the hundreds of thousands of Sears workers did not like him because he adhered to Ayn Rand's philosophy. Contrary to the advice of most business people, he separated his divisions into silos.

Knowing better, Lampert would change the firm into a data-driven behemoth that would offer you the identical shirt you were eyeing yesterday along with a washing and dryer set to launder it.

"Turnarounds occur when a business repeats an action that it has previously done effectively. In May 2014, four years before Sears Holdings would file for bankruptcy, Lampert wrote in a blog post, "Transformations are almost entirely different—they occur when companies adapt their business model to fundamental shifts in technology, competitive landscapes, government policies and regulations, or macro trends to serve their customers (or, in our case, members) in new ways."

Sears Whitter's dormant escalator in 2023 (Author Photo)

The core of the photo of the author surrounding Sears is the change Lampert describes. A lot of resentment is directed toward Lampert, who is infamous for reportedly seldom visiting the company's headquarters in Hoffman Estates, Illinois, which is outside of Chicago. Teleconferences were his favored method. Until the shops could demonstrate that they could turn a profit, he didn't want to invest money in them.

Employees find it difficult to use outdated point-of-sale systems. (Author photo)

Condensing the mystery

Many people argue that Lampert's true strategy was to manage Sears mediocrely, deprive it of resources, and then sell and profit off the real estate bones when the inevitable took place. In my opinion, this is oversimplified, and he probably attempted to pursue it seriously for a while, but the mystery's facts at this point in 2024 are quite confusing:

The webpage for Transformco is quite outdated. In 2021, a shop closing is announced in the most recent blog post.

The Transformco career website does not list any retail support positions. It seems that corporate attention to retail is lacking.

Tracking dates from years past, including 2009, are shown at the bottom of signs around the Whittier shop, indicating that no new marketing collateral is being produced.

A store's reopening is often a significant occasion. There was hardly any hoopla when Sears reopened one shop each in California and Washington.

Shops use Facebook to promote themselves.

Sears' social media presence makes the storefronts seem nonexistent.

Why are the businesses open in light of these facts? One of the Kmart lawsuits, Ted J. Boutrous, LLC v. Transform Operating Stores, LLC, was filed in North Dakota.

The hilariously little Kmart that operates in Miami may be explained by this. After giving some thought to the mystery, which can be simply stated as "Why is Sears still operating 11 stores, with little corporate support and with increasingly sparse merchandise?" I have concluded that Lampert is currently only running the stores as part of his real estate strategy in the hopes of making some money from this deal he ruined due to his own apparent inability to turn this once great company into a long-lasting success.

The sad thing is that Sears and Kmart are now just a shadow of what they used to be, having formerly offered thousands of good jobs with benefits and even pensions. Lampert telling me and the skeptics that I'm mistaken would be wonderful. However, it would need a public declaration, which he has been reluctant to do since 2024. Maybe there's nothing else to say.