Sunday, February 10, 2008

Sears, Roebuck and America


















































Sears didn't have a single retail location for nearly the first forty years of its existence. Founded in 1886 by Richard Sears and Alvah Roebuck, the company established its initial reputation and fame as a “catalog supply house”, shipping all manner of goods to (mostly rural) locations all over the country from its Chicago headquarters. Along with its chief competitor Montgomery Ward, founded eight years earlier and also based in Chicago, Sears sold a vast variety of clothing, tools, books and Bibles, farm supplies, livestock, camping supplies, groceries and on and on out of a huge catalog, issued annually, often exceeding 1000 pages, and selling for 50 cents to $1 at a time when that was a fair amount of money. By the early 30’s, catalog volume had grown so much that the company had added distribution “plants” in Kansas City, Atlanta, Memphis, Los Angeles and several other cities to augment the output of their Chicago home base.

Alvah Roebuck retired in 1895 (he would return to the company in a PR role for a brief period in the early 1930’s after some personal financial reversals), selling out his interest to Sears. That year, Sears took on a new partner, Julius Rosenwald, who infused the company with badly needed cash and installed a system of management controls that would help facilitate Sears’ phenomenal growth in the coming decades. The most important move Rosenwald made had nothing to do with policies or procedures, however, but with the hiring of an individual, General Robert Elkington Wood, who would reshape the direction and destiny of the company.

A West Point grad who would as part of his military career help oversee the excavation of the Panama Canal, Wood would retire from the military after World War I as a Brigadier General, beginning a career in 1919 with Montgomery Ward. Wood observed early on that the American population was migrating from rural to urban life. He pushed Ward to open store locations to take advantage of this trend, which they began to do at an exceedingly slow place and chose, to Wood’s chagrin, to use the stores as a dumping ground for inferior merchandise and closeouts. Frustrated by what he saw as resistance to his ideas at Ward, Wood was receptive when Sears’ Rosenwald came calling. Wood hired on at Sears as a Vice President in 1924. Four years later, he was named president and in 1939, he would become company chairman.

In 1925 Sears opened its first store in a corner of their Chicago mail-order plant. Wood saw to it that more stores followed at a fast pace, giving Sears a total of over 350 stores by 1930. The following year, 1931, store sales overtook catalog sales for the first time. Sears continued to open retail stores aggressively through the start of World War II, when (as with most all chains) new construction ground to a halt by necessity.

Another Wood initiative was the introduction of a line of tires (initially manufactured for Sears by Goodyear) and automotive accessories under the brand name “Allstate” in the late 1920’s. A most unusual extension of the Allstate product line was introduced in 1931 – car insurance. The Allstate Insurance Company, at Wood’s behest, was set up as a wholly-owned subsidiary that year, and for its first 25 years sold only auto insurance. In the late 1950’s, Allstate wrote its first life insurance policy. By the early 60’s, Allstate was a billion-dollar business in and of itself.

Once WWII ended, Wood, true to form, pushed Sears to the forefront of postwar retail expansion. Three major factors, among others, were now in play – first, a large percentage of the population was now shifting from urban locales to rapidly-growing suburban areas. Secondly, major regional shopping centers and the earliest malls were now being built, and thirdly, the explosive growth of the Southern, Southwestern and Pacific Coast markets begged increased presence there. Sears, under Wood’s leadership and that of his hand-picked successors, rose to the challenge in all three respects.

General Wood retired from the chairmanship of Sears in 1954. The next year, Wood was the first living individual to be named to the Retailing Hall of Fame, joining the ranks of John Wanamaker, George Huntington Hartford (founder of A&P) and Marshall Field, among other legends. Wood remained an active member of Sears’ board until 1968. He then became “Honorary Chairman”, a designation he held until he passed away at the age of 90 in 1969. Wood was posthumously honored alongside Marshall Field in the naming of northwest suburban Chicago’s massive Woodfield Mall, (which was co-developed by Sears and opened in 1971), a fact that is probably lost on most Woodfield shoppers and was something I was certainly unaware of during the years I shopped there.

The photos above are circa 1951, and show some of the larger Sears stores opened in the first few years of Sears’ postwar boom, a period that to my observation appears to have extended through the late sixties, give or take a few years. The first photo is of the North Hollywood store (here’s a color close-up), the second is of the San Francisco store on Geary Blvd., which a commenter on the previous post kindly informs had a restaurant on the top level and is now a Best Buy/Mervyn’s combination. The remaining stores, in order, are from Dayton, OH, Raleigh, NC, Wilmington, DE, Waco, TX, and Springfield, MA. Note the "Allstate" auto center in the last photo.

12 comments:

  1. Wow, interesting history on Wood. I am confused though, I thought Woodfield was a Taubman mall.

    There is a Sears store on Lawrence, a little bit west of Clark street in Chicago's Uptown Neighborhood, it is very old, very tiny and a very cute and still used store. It is a bit small though but I recently took photos of the outside and hope to feature it soon. I was inside not long ago and was amazed at the small escalators and stairs that led up to really small showrooms. It is a shame that Sears has not worked harder over teh years to keep in the game. All the changes they made were for the worst and I really fear what comes next.

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  2. Taubman was the main developer. Sears real-estate subsidiary, Homart (I guess the name had something to do with Sears original Homan Av. headquarters address)co-developed it with them.

    I'd love to see pics of the Lawrence Av store. I'm with you, and hope that Sears makes it. They really are a part of American history.

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  3. didi; Because they were backed by the strength of their catalog and delivery operations, Sears could match the size of their [urban] stores to their surroundings. Until they closed the catalog department, even suburban stores had a catalog desk. Largely because the catalog department was 'senior' and carried a great deal of political clout within the organization until the 1980's.

    Between this, and a never ending series of attempts to diversify, control of retail operations lay largely with the regional managers with little oversight from Chicago. By the time this began to be corrected in the 1980s, Sears was already sliding - caught between Kmart, WalMart, and the other discount chains on one hand and the growing power of Federated Department Stores, Target, and their ilk on the upper. The squeeze continues to this day - and Sears persists in being unable to maintain a clear vision of their market.

    The problem is, I think, institutional. Sears spent so long as the 900 pound gorilla of American retail that they really can't concieve how greatly the world has changed around them.

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  4. Dave, I will get going on posting hopefully sometime this week.

    Derek, I agree with so much of what you say especially the last part. No one out there can seem to get them back in shape. I believe that Lampert is running them to the ground with his focus on not really changing anything. The plan that he supposedly devised recently is not much of a plan and everytime Sears made changes, like a few years back with new layouts that had the competing against Walmart and Target it was way too late. Getting out of the slump will be short of a miracle for them.

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  5. Sears created the mall/big box prototype period, as can be attested from these pictures. You could easily build mall attached to one side or build a shopping center around any of these stores and they wouldn't appear out of place(assuming the additions would be contempory to the architecture of the store).

    I too am a little distraught that Lampert really has no clue of where to take the iconic retailer. It seems his strategy of cost cutting/corner cutting can only go so far, which it pretty much has and the new plans regarding Sear's key private brands seems to be only a plan to ultimately make Kenmore, Die Hard and Craftsman national brands sold anywhere or either solely to generate a favorable response out of Wall Street without rescuing the vetern of American retail.

    Despite past problems, the Sear's name is fairly trusted by most shoppers, it simply doesn't have the excitement or trendiness of many of its competitors and its soft lines which have the highest margins are laggards while its hardlines have a virtually unscathed reputation. Modernizing the stores and improving the quality of selection of softlines shouldn't take a miracle, but getting customers back may. A promised KMart-Sear's hybrid, Sears Grand and Sear Essentials has been poorly executed, lacking discount prices in a discount store environment which looks like a cheap paint job on an old Kmart, other than the initial prototypes.
    If the stores had a contemporary panache and pricing competitive with Wal-Mart and Target and the big boxes, Sears hardlines would separate them from the pack.

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  6. I am no business genius but I do think that spinning off the one real thing that people can only get exclusively at Sears is a very bad idea. Lampert does this and loses the rest of the last customers they have. Then what?

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  7. very nice here I feel right at home, even some familiar folks from the MOA site--Hi everyone, love the hardware department shop

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  8. Peterb - Glad to have you here, and thanks!

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  9. Funny story about sears catalogs...My grandmother, growing up in a rural area of NJ in the 1930's-40's had no indoor toilets so they used out houses...and toilet was- you guessed it! Sears catalogs!!! They used to rip the pages from the catalogs when they were done with them and use it as toilet paper.

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  10. Pika23, My grandparents did the same thing! Indoor bathrooms and Charmin were two great inventions, that's for sure!

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  11. I drive by that Sears in North Hollywood every day (it's at the corner of Victory and Laurel Canyon Boulevards). Looks a little bit different now, 55+ years later -- in theory, this link will get you to a Google Street View photo.

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  12. Jim - It looks a bit different, but is still hanging in there,and that's great. I also looked at Windows Live Local and noticed that the small "window" details are still there, despite the extensive remodel. Looks like a huge store!

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