Sears, the department store giant that has been referred to as the “Amazon of its time” by many, declared bankruptcy Monday, the latest casualty of the changing retail landscape.
A large number of Sears and Kmart stores will remain open in the wake of the filing for Chapter 11 bankruptcy protection as it works to reorganize. Sears will close 142 stores, the company said, in addition to the 46 closures announced last August. Today it has 687 locations, including Kmart stores, and about 68,000 employees.
“Our goal is to emerge as a member-centric company, reorganized around a smaller platform of profitable stores, with the capital needed to allow us to prosper in the future,” Sears Holdings, the parent of both Sears and Kmart, said in a statement. It added that not only do brick-and-mortar locations remain open, but that its “online and mobile platforms … are open and continue to offer a full range of products and services to members and customers.”
The company has been hemorrhaging money in recent years after decades as one of the biggest names in retail. In its most recent quarterly financial report, released in September, Sears reported a net loss of $508 million, more than double the losses from the year prior.
Sears becomes the latest major retailer from the brick-and-mortar era to declare bankruptcy as e-commerce, led by Amazon, has became a major factor. While some retailers have failed to adjust to the new landscape, others like Best Buy have embraced the blending of physical and digital retail and found success.
Sears first became known for its general mail-order catalog which began in 1896. From it, customers could order pretty much anything, from musical instruments to kit houses. Up until the Great Depression era, the company had no physical stores and relied heavily on farmers as its primary customer base. But Sears ended its flagship general merchandise catalog in 1993, just before the internet and e-commerce became a major factor in how consumers bought products.
Sears’ rise foreshadowed that of Amazon in a number of ways. It built its reputation by having the best distribution network and selection of items through what became the massive catalog. It then made the dive into physical retail, becoming a ubiquitous presence with stores all over the country.
When Sears and Kmart merged in 2004 at a price of $11 billion they had a combined 3,500 stores, but the stars of the retailers had already begun to fade. The latest blow for Sears came Monday, when a $134 million debt payment it could not afford came due.
Sears’ impact can be seen throughout the nation, from the former Sears Tower in Chicago, now Willis Tower, all the way to Seattle. In 2015, Sears acquired the WallyHome sensor technology from Seattle startup SNUPI Technologies and took over a lease on the University of Washington campus. That move was in addition to Sears opening an engineering office in Seattle in 2015.
