American comedian Ron White frequently tells a story about how his van was damaged in a comedic way by the technicians at a Sears Automotive Center in Savannah, GA. This week, that Sears Automotive Center is being torn down. While the shopping mall that former Sears location is a part of is otherwise doing well, the Sears has been closed for years. The department store end-cap building and the car service center in its out-parcel property are being demolished to make way for the development of a new apartment complex.
A link to Ron preforming the story for a live audience.
so weird. sears was such a powerhouse… a pillar of retail for so long. it was legendary during my youth. kinda sad how it was sold off/collapsed piece by piece, department by department
What’s really amazing to me is they could have EASILY pivoted and become a mega online retailer like today’s Amazon. They literally had all the pieces already in place with their catalog/mail order/warehouses.
They probably would have been fine regardless of Amazon if they hadn’t been run into the ground by a libertarian econ major.
In 2008, Sears CEO Eddie Lampert decided to restructure the company according to Rand’s principles.
Lampert broke the company into more than 30 individual units, each with its own management and each measured separately for profit and loss. The idea was to promote competition among the units, which Lampert assumed would lead to higher profits. Instead, this is what happened, as described by Mina Kimes, a reporter for Bloomberg Business:
An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.
Instead, the divisions turned against each other — and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources.
A close-up of the debacle was described by Lynn Stuart Parramore in a Salon article from 2013:
It got crazy. Executives started undermining other units because they knew their bonuses were tied to individual unit performance. They began to focus solely on the economic performance of their unit at the expense of the overall Sears brand. One unit, Kenmore, started selling the products of other companies and placed them more prominently than Sears’ own products. Units competed for ad space in Sears’ circulars…Units were no longer incentivized to make sacrifices, like offering discounts, to get shoppers into the store.
That ceo destroyed that company. I worked there for ten years and watched the damage that idiot did.
Kenmore, started selling the products of other companies
This was a huge deal for consumers. Suddenly you had a powerhouse of home appliance sales and service, covering just about everything. When I was a kid, every time any appliance broke, I knew we’d head to Sears parts counter, look at the service manuals on microfiche (before the internet) and be able to get exactly what was needed and how to replace it.
It was so much more convenient than today where no one carries parts anymore, so even repairmen walk in, order the part, and have to be scheduled to come back.
They literally had all the pieces already in place with their catalog/mail order/warehouses.
They already screwed up however
In 1993, Sears discontinued its famous catalog to focus on in-store retail operations.
To fight off Walmart they got rid of all the shipping and things that made the catalog work in 1993 like the little outlet /pickup stores in small communities.
They focused on the physical stores and peaked in 2007 just in time for Amazon to take off. They no longer had all that distribution that gave up in 1993.
This is correct. And to add to this, not only did Sears employ a “retail first” model at precisely the wrong time, they continued to cling to it well past the time the writing was already on the wall that this was a dumb idea.
Sears did, of course, eventually have an online commerce web site just like everyone else. But the problem was Retail Firsttm! so their online pricing and selection was the same as their in store selection, i.e. significantly more expensive or limited than everyone else’s, or both. They also categorically failed to add third party vendors to their web site until a literal decade after Amazon and even Walmart did.
Same thing happened to Blockbuster, the giants never think their day will come
At least Blockbuster had the excuse of a major technology change that obsoleted their entire business. You could argue they should have foreseen that as they were consolidating the industry and done more to welcome new models, but they were doomed.
Sears could have been a contender. They had all the advantages and fell through their own bad vhoices
I had a love-hate relationship with Sears for a long, long time. We’d always shop around for larger purchases, and quite often Sears would end up getting the sale, and then I’d have to put up with the salesperson bugging me about opening a Sears card and buying an extended warranty, and then being obstinate about taking NO for an answer. Of course, this was back when Craftsman Tools and Kenmore Appliances tended to be better than average. Hell, about 6 months ago we finally replaced a Kenmore refrigerator that we bought in '99. It’s currently cooling beer in my bro-in-laws garage. I’m still using Craftsman tools I bought 30+ years ago.
Yeah, even back in the nineties they were still making good stuff. My mom always bought my jeans there as a kid because they sold a store brand that had reinforced knees. I was an outdoor child and ran through clothing at an alarming rate.
Yeah I felt sorry for the staff. When I would check out towards the end the cashier would insist they had to have my phone number. And they wouldn’t admit to there being any way to bypass it. I actually memorized the store phone number and gave that to them on the rare occasion I went there any more.
