By Alex Chrisman

There was a time, not that long ago, when Sears was on top of the retail world. If Grandpa wanted a washing machine, he went to Sears. If Dad wanted some tools to work on that ‘68 Camaro he’s had in the garage for the last 15 years, he might very well go to Sears; if Mom wasn’t too picky about her clothing choices, she might take advantage of the softer side of the enormous full-line retailer.

In 2005, Sears Holdings boasted almost 3,500 stores. Today, nine remain. The fact that any remain at all comes as a surprise to many who have long assumed the company was dead as a physical retail presence. The company that operates these stores in 2024, Transformco, is mum on its intentions. Is Sears trying to make a comeback, as some say, or is the operation of these dated locations simply a means to a profitable real estate end?

“We are expecting new merchandise soon,” an employee said. I hope that her optimism was not misplaced. A Sears in Palm Beach Gardens in Florida had closed unexpectedly in early March with no warning to staff or customers.

As I did on each visit, I stood in the store, taking in the view, reading the signs asking me to “Rediscover Sears” and marveled that such a mighty company had fallen to the point that a single new appliance was a big event.

How did this happen? Why are 11 stores still being operated, without distribution centers and with seemingly no meaningful corporate support, beyond the bare minimum? So many questions for the curious mind.

A brief history

It wasn’t always this way. Sears was once a proud company, the №1 retailer in the United States and a true national institution. Richard Warren Sears had gotten his start in 1886 selling discarded watches in a train station. He loved selling and soon enough grew his side gig into a large business with the help of Alvah Roebuck, the money man who focused on paying the bills while Sears kept hustling.

The extensive history is well documented at the Sears archives. Sears pioneered the catalog business, allowing rural customers to have their very own slow-paced version of Amazon back in 1893.

You could order just about anything from Sears via the thick book; everything from cars, to guns to houses. Many of those houses, built from kits, are still around today.

The company was so successful that it built the Sears Tower in Chicago, which in its day was the tallest building in the world. As written in the archives, “The 110-story Sears Tower became the world’s tallest building at 1,454 feet when it was opened in 1973. The staggering amount of materials needed to construct the building included 76,000 tons of steel, 2 million cubic feet of concrete, 16,000 tinted windows, 1,500 miles of electrical wiring and 80 miles of elevator cable.”

This was no small company and was the №1 retailer in America until 1991, when it was passed by Walmart, a decidedly down-market competitor.

In 2005, Kmart purchased Sears, led by the hedge funder Eddie Lampert. This was after years of decline, Sears having taken its eyes off the ball by focusing on seemingly everything besides its greatest strength, hard lines, also known as tools and appliances.

An ill-fated attempt to push apparel through the “Softer Side of Sears” campaign ultimately failed when the purchasing department couldn’t keep the promises of the marketing team. Sears had long been saddled by its mall locations, which were just not as convenient as Walmart and Target.

By merging with Kmart, Sears should have had an advantage, since most Kmart locations were off-mall and in strip malls and power centers around the country. Fast Eddie, as many call him, was ready to spread the gospel of “integrated retail.” Members — don’t call them customers, employees soon learned, unless they wanted to be yelled at via teleconference — could shop in store and online.

On paper, it made a lot of sense. However, Lampert was no retail expert. He had successfully made money with AutoZone using his methods, but Sears is not AutoZone and his devotion to the dogma of Ayn Rand didn’t endear him to the hundreds of thousands of Sears employees. He divided his departments into silos, doing the exact opposite of what most in business would advise.

Lampert knew better, and he would transform the company into something different, a data-based powerhouse that would sell you the exact blouse you were thinking about yesterday and a washer and dryer combo in which to launder it.

“Turnarounds happen when a company succeeds again at doing what it had once done successfully before. 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,” Lampert wrote in blog post in May 2014, four years before Sears Holdings would declare bankruptcy.

This transformation Lampert speaks of is the heart of the controversy over Sears. There is a great deal of anger towards Lampert, who famously is said to have seldom visited corporate headquarters in Hoffman Estates, Ill., outside Chicago. He preferred teleconferences. He didn’t want to spend money on the stores unless they could somehow prove they could make the money back.

Summing up the mystery

There are many who claim Lampert’s real game was to half-heartedly run Sears, starve it for resources and sell and profit from the real estate bones when the inevitable happened. I personally think this is too simplistic, and that he likely did try to make a real go of it for a time, but at this point in 2024 the facts of the mystery are quite bewildering:

• The Transformco website is wildly out of date. The last blog post, in 2021, announces a store closure.
• There are no retail support jobs on the Transformco career page. It appears there is little in the way of corporate focus on retail.
• Signage throughout the store in Whittier has tracking dates on the bottom from years ago, in one case 2009, suggesting that no new marketing material is being created.
• The reopening of a store is usually a big event. When Sears reopened one store each in Washington and California, there was very little fanfare.
• Stores market themselves on Facebook.
• The social media presence of Sears pretends the stores do not exist.

Considering these facts, why are the stores open? A legal filing involving Kmart filed in North Dakota, Ted J. Boutrous, LLC v. Transform Operating Stores, LLC, suggests an answer. “Boutrous [argues] that the eviction action falls squarely within the statute’s substantive and procedural requirements, and that summary eviction…was straightforward since Transform was not occupying the property, having closed the Kmart store a year before the eviction hearing. Basically, if Transformco does not operate the store, then they are in violation of the lease and could lose control of the property.

This might explain the comically tiny Kmart that is operating in Miami. Having considered the mystery for some time, put plainly as “why is Sears still operating 11 stores, with little corporate support and with increasingly sparse merchandise?”, I have come to the conclusion that at this point Lampert is only operating the stores as part of his real estate strategy to hopefully make some money out of this deal he tanked with his own apparent inability to make an enduring success out of this once great company.

The tragedy of the matter is that Sears and Kmart once provided thousands of solid jobs, with benefits and even pensions, and now is left a mere shell of its former self. I’d love Lampert to tell me and the doubters that I am wrong. But that would require him making a public statement, something he has been loathe to do in 2024. Perhaps there is nothing left to be said.

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I am always grateful for any contribution towards my journalistic endeavors: https://www.paypal.me/trivalmaster

Sources: Sears Archives, Eddie Lampert’s personal blog, Casetext, Institutional Investor https://www.institutionalinvestor.com/article/2bsxn8l0u5yr6zhelmhog/corner-office/eddie-lampert-shattered-sears-sullied-his-reputation-and-lost-billions-of-dollars-or-did-he