DENNIS SEID: Another US retail icon sits on edge of extinction

By Dennis Seid | NEMS Daily Journal

“Satisfaction guaranteed or your money back.” That was the simple promise made by Sears Roebuck & Co., and it worked well for nearly a century.
Sears got its start as a catalog company, selling its wares through a catalog that numbered hundreds of pages. Remember the Sears Wishbooks?
Quality and service were synonymous with Sears. And when it opened its first retail store in 1925, it had a well-established customer base.
Sears expanded across the country and was at one time the largest retailer in the country. Then a small Arkansas businessman named Sam Walton came around.
The Sears I grew up with was an anchor store in a mall. McRae’s was the other anchor. TG&Y, too. Other department stores in town included Howard’s and Gibson’s. Sound familiar?
Sears was an exciting store back in the day. It had Winnie-the-Pooh. It had Craftsman and Kenmore. The store had a catalog center, an appliance department, an electronics department and even a portrait studio and insurance office. It was the department store of all department stores. Virtually a one-stop shop, minus the groceries.
Sears also diversified outside of retail. It added brokerage business Dean Witter and real estate company Coldwell Banker. It also introduced the Discover credit card. All of them were later spun off.
Then there’s Kmart, which got its start as a five-and-dime in Michigan.
The “Blue Light Special” was Kmart’s hook, and it was a discount store that grew quickly as well. Kmart also expanded, adding the Sports Authority, Builders Square and Waldenbooks. They, too, were spun off later.
Walton, Walmart’s founder, visited many Kmarts to see what they were doing in the early days. Obviously, he learned to do it better.
One of Walmart’s early taglines was, “Always the lowest price on the brands you trust.” That message stuck and drew in customers. Still does.
But Walmart also was innovative. It built its own fleet of trucks, set up an unparalleled distribution system and invested heavily in technology.
Sears and Kmart – not so much. While their upstart rival Walmart evolved, renovated and expanded, they did little to keep and attract customers.
Kmart filed for bankruptcy in 2003. Hedge fund manager Edward Lampert acquired the company, then went after Sears in 2006. The merged companies became Sears Holdings.
Two weeks ago, the company announced it was closing up to 120 stores. Retail analysts expect that’s just a start.
Take a hedge fund expert with little knowledge of retail and look what happens. Experts at the time of the merger said Lampert would leverage the prime real estate assets of Sears and Kmart. That worked for a while, but it was short-term fix for a situation that needed long-term solutions.
And so, years of neglect have hastened the demise of what were two retail giants at one time. Montgomery Ward, TG&Y, Howard’s and a host of famed retailers are gone.
Unless Sears Holdings gets serious about its crumbling retail empire, Sears and Kmart will soon join them.
And there’s no satisfaction in that.
Dennis Seid is the business editor of the Daily Journal. Contact him at (662) 678-1578 or dennis.seid@journalinc.com.