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Why Sears Was Doomed Back In 1978
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Sears, once America's golden retailer, is closing dozens of stores — including its flagship location in Chicago — to try and revive revenues.
The company's sales have been falling since 2005, but its problems may stretch as far back as the late 1970s, when Sears executives characterized the retailer as a reflection of Middle America's "concerns," "problems and faults."
"We are not a fashion store. We are not a store for the whimsical, nor the affluent," Sears executives wrote in an internal 1978 document obtained by Crain's Chicago Business. "We are not a discounter nor an avant-garde department store. We are not, by the standards of the trade press or any other group of bored observers, an exciting store."
The document was part of a forward-looking five-year plan, referred to as "The Yellow Book." Crain's republished its 36-year-old report on the plan this week after the company announced it would be closing its flagship store in Chicago.
When "The Yellow Book" was written, the retailer was in its heyday. Three out of four Americans shopped at Sears annually, according to the company.
Yet the company seemed resigned to let its competition take the lead.
"We are not a store that anticipates," executives wrote at the time. "We reflect the world of Middle America and all of its desires and concerns and problems and faults."
Rance Crain, president of Crain Communications Inc. and editor-in-chief of Advertising Age, wrote in 2003 that "By not anticipating, Sears allowed retailers such as Wal-Mart, Home Depot and Target to carve out gigantic chunks of its bread-and-butter business. By not anticipating, Sears has become an imitator, and one that has ceased to even reflect its once cozy world of Middle America."
Retail consultant Robin Lewis says the company continues to have a self-destructive view of itself today that has been perpetuated by CEO Eddie Lampert, who took over in 2005.
"The recent closing of another Sears store is just another play out of Eddie's long established playbook, the playbook of a brilliant financier on how to manage a company down, and ultimately into liquidation," Lewis said in an emailed statement following news of Sears closing its flagship location in Chicago. Lewis says Lampert has been selling off the company's assets " to generate cash which he can then invest somewhere outside of the retail businesses."
The company said it was closing the store due to its poor performance.
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