History Of Sears, Roebuck and Co.

History Of Sears, Roebuck and Co.

Feature Photo: rblfmr / Shutterstock.com

Before getting into the history of Sears, Roebuck, and Co., learning more about the man behind the department store giant should be covered first. Born and raised in Minnesota in 1863, a young Richard Warren Sears started off as an agent for a railroad station in North Redwood, Minnesota after his father passed away in 1879. While there, Sears purchased a refused shipment of watches before selling them off to fellow station agents. In 1886, he used the profits he earned from it to set up a mail-order business in Minneapolis, selling watches as R.W. Sears Watch Company. It was that same year he met a watch repairman named Alvah Curtis Roebuck. In 1987, both men relocated their business to Chicago, Illinois before publishing its first mail-order catalog. At this point, the company wasn’t just limited to selling watches. It now began to sell diamonds and jewelry as well.

New Horizons

For $100,000, Richard Sears sold his company and relocated to Iowa in 1889. He fancied becoming a banker in its rural region before deciding to move back to Chicago a few years later. He began a new mail-order company, working with his partner, A.C. Roebuck, to once again get into the business of selling watches and jewelry. At this time, the company was under the A.C. Roebuck brand. In 1893, the name of the company became Sears, Roebuck, and Co. In addition to the name change, the company expanded its lineup of products in order to cater to a broader market. This market included reaching out to farming families who had to rely on paying high prices at local general stores in order to get the goods they needed. With such limited availability, along with price tags that were higher than the norm among rural communities compared to the cities, the appeal of the mail-order catalog served as an appealing alternative.

Richard Sears

Photo: Everett Collection / Shutterstock.com

Back in the day, a local general store would determine the credit value of a farmer before deciding how much something was going to be sold for. With the catalogs distributed by Sears, the prices were upfront, along with a much larger selection than whatever the brick-and-mortar shops carried. What started out as a humble little catalog featuring a few pages of jewelry and watches now reached well over three hundred pages worth of products by 1894. The exact number was three hundred and twenty-two pages, which then had an additional two hundred and ten pages by 1895. In 1896, there was something to be found for anyone, even for children looking for new toys.

Despite Sears, Roebuck, and Co. expanding by leaps and bounds between 1893 to 1896, it was not immune to the nationwide recession it felt when the country underwent a financial depression. Historically known as the Panic of 1893, the economic and political impact it had upon every citizen from state to state throughout America also saw Sears, Roebuck, and Co. suffer. With unsold products simply sitting with no buyers able to purchase them, the company’s sales margin took a major hit from the $750,000 annual it experienced in 1895 to just barely able to keep the business going. Roebuck chose to quit, which prompted Sears to sell his partner’s half to a Chicago businessman named Aaron Nusbaum.

Nusbaum then recruited his brother-in-law, Julius Rosenwald to help him in this venture. Sears already owed Rosenwald money at this point, so at $75,000 USD, Roebuck’s half of the mail-order catalog business went to him and Nusbaum. In turn, the men reincorporated Sears, Roebuck, and Co. in Illinois with a capital stock of $150,000. The legalities were taken care of by Albert Henry Loeb from Loeb & Adler, a law firm in Chicago that now goes by the name of Arnstein & Lehr. Gracing the law firm’s walls are copies of this historical transaction that would start a new chapter for Sears, Roebuck, and Co. It should be pointed out here that Roebuck later returned to the company but as one of its publicists.

Going Public

While Richard Sears and Julius Rosenwald had no trouble getting along with each other, the same could not be said about Aaron Nusbaum. Richard Sears and Julius Rosenwald bought out Aaron Nusbaum in 1903 for $1.3 million to take him out of the equation of Sears, Roebuck, and Co. At this time, Rosenwald’s management skills helped the mail-order firm further diversify its access to various goods. For farmers and citizens living in rural communities, what this company had to offer seemed limitless. By 1906, Sears and Rosenwald took the company public with a stock placement of forty million dollars. In order to qualify as a public operation, Sears and Rosenwald had to incorporate it. Once they were established as Sears, Roebuck, and Co. legally in the state of New York, this replaced the old company as a whole new entity of its own. Although the title of Sears, Roebuck, and Co. remains the same before going public, this was to hang onto the original 1892 roots by its name only.

When the 1906 initial public offering of Sears became successful, this marked the first major retail of its kind in American history. This began a new age in the consumer and financial sector, which traded under the symbol “S.” Starting in 1924, it became a component of the Dow Jones Industrial Average until 1999. It would also be in 1906 the Sears Merchandise Building Tower in Chicago’s West Side would have its catalog plant built. This served as an anchor of what became a forty-acre Sears, Roebuck, and Company Complex of offices at Homan Avenue and Arlington Street. Until 1973, it served as the official headquarters until the construction of the Sears Tower was completed. From 1973 until 1995, all mail-order catalog operations came from this location.

Sears Tower

Photo: Chris6d, Public domain, via Wikimedia Commons

Sears and Rosenwald

Thanks to Rosenwald’s savvy as a businessman, he led Sears, Roebuck, and Co. to an incorporated retail giant worth about fifty million dollars by 1907. At the time, he served as the company’s vice president and chairman. In 1908, Sears elevated Rosenwald to the president and chairman of the board when his health began to decline. Now in full control, Rosenwald continued to expand Sears, Roebuck, and Co. through the 2010 acquisition of David Bradley Plow company, which was located in Bradley, Illinois. When the American farmers were hit hard from 1919 until 1921 with a financial depression that threatened the stability of the company, Rosenwald invested over twenty million dollars of his own money to ensure Sears regained its financial stability as a company in 1922.

With the depression experience brought on by the farmers overexpanding their holdings that resulted in the financial scare from 1919 until 1921, Rosenwald looked into appealing to the urban American market instead of just rural. With Robert E. Wood as the man to take the helm of this project, the first Sears Department Store was built within the Sears, Roebuck, and Company Complex in Chicago. A year before the store opened in 1925, Rosenwald resigned as company president but remained as chairman until he passed away in 1932.

Sears Department Stores

On February 2, 1925, the first Sears Department Store was officially opened. It was located in what was considered the outskirts of Chicago, Illinois at that time. Thanks to the success of what became an incredibly popular store, there was a spawn of additional openings across the nation. This was mainly in conjunction with the mail-order offices belonging to the company, which were mostly located away from the downtown shopping districts. Neighborhoods featuring lower middle class to working-class citizens benefited from what was deemed as unconventional department store locations at the time. Instead of having to travel downtown to buy merchandise, buyers could do so at locations much closer to home. This became especially obvious after cities like Chicago and New York City began to build extensive streetcar networks that allowed an increase in car ownership among the people who could travel anywhere they want to buy what they want.

What Sears accomplished as a retail outlet, not just in Chicago, but in New York City, as well as nationwide, was change the face of conventional shopping as the people knew it. The pioneering spirit behind the architectural designs that went into department stores like Sears became a big part of the Art Deco age. Architects and designers like Bertram Goodhue, George C. Nimmons, and Eliel Saarinen were each credited for what became a big trend in American architecture. During an era that saw stores like Sears opening up to cater to a targeted buyer group in designated areas that worked best for them, this forever changed how American retailers would do business.

In Los Angeles, Sears-Pico became the first store of its kind with its air-conditioned, open floor design that had no special store windows. As a department store, Sears was among the first to separate men’s fashion from women’s. It also focused more on products specializing in durability, practicality, and longevity. The popularity of Sears saw its chain of department stores extend into the nations of Canada and Mexico. Over time, the department stores began to overshadow the mail-order business. The inspiration behind the store Sears opened in Los Angeles came from the Century of Progress International Exposition in Chicago in 1934. The windowless design allowed more display space than previous.

History Of Sears, Roebuck and Co.

In Mexico, the first Sears Department Store opened in Mexico City in 1947. Since then, Sears Mexico has expanded to nearly one hundred stores throughout the nation. The expansionism of Sears continued in 1959, forming the Homart Development Company as additional malls were being developed in the suburbs and surrounding communities. Since then, as HDC, the company has embarked on major renovation projects to either restore existing stores back to their former glory or simply replace them as needed.

Sears and New York City

The full clarity of when Sears, Roebuck, and Co. opened its first New York buying office comes from a 1907 Sears company directory that lists a New York City office at 438 Broadway, managed by Robert P. Sniffen. This, however, served as an important part of the company’s buying power and expansive reach that had this corporation reach out to customers as far away as the Philippines. In 1907, Sears was still technically a mail-order catalog operation only. The first of its department stores didn’t go up until 1925 and that was in Chicago, Illinois.

However, in 1920, the New York City office was now located at 115 Fifth Avenue which included a staff roster of seventeen people. They were responsible for supplying New York buyers who bought everything from clothing to housewares. When Sears began to open erect department stores in 1925, it was realized that in-store shoppers were more interested in attire than they were in anything else the catalog had to offer. It was through this reality the New York City buying offices focused on catering to the fashionably conscious.

As of 1928, the New York City office became Department 664 as they moved to 881 Broadway. This became the New York headquarters for Sears’s Modern Homes Catalog Home Program. For a brief period of time, the company recruited a New York City-based construction crew to build larger catalog homes, as well as contracted out for home remodeling. Long before home kits became a trend in today’s market, Sears already had this area covered not long after establishing themselves in New York City. This was a product and service that was available to the consumer market from 1908 until 1940.

Starting in 1930, Sears bought a quartered interest in the Henry Rose Stores of New York City. Thanks to the acquisition of this fashion company, it was the goal of Sears to improve upon its clothing lineup. Sears realized from the get-go the centralized buying system in Chicago was not enough to keep up with the trends in ladies’ fashion. Not only was Henry Rose contracted to merchandise ready-to-wear attire for ladies but the millinery for all the retail stores across the country. The Henry Rose company was also responsible for the shipment of Sears products to all store locations, as well as setting up store displays, and restocking. By 1994, Henry Rose was under the full ownership of Sears.

At 360 W. 31st Street, the 1940 Sears New York City office had well over one hundred buyers and support staff that included a New York Catalog Production Manager, Group Credit Supervisor, Personnel Manager, and even a physician. In 1960, when James Button ran the office, it also had its own Fashion Merchandising Center, Merchandise Development Design, Public Relations Department, and Testing Lab. From 1960 until 1965, there was a fairly small store that primarily stocked soft lines. Dubbed a B3 store, it was located on 31st Street before it was shut down.

By 1977, over seventy percent of the women’s fashion line from Sears came from the New York office locations. The testing lab in New York City focused primarily on testing fabric materials and garments. The presence of Sears in New York City was heavily felt until the company decided to pick up and move all of its office operations to downtown Chicago in 1978. It was believed doing so would make the company more efficient. By April 1979, all but a few buyers were officially moved to Chicago.

Located on the corner of Beverly Road and Bedford Avenue in Brooklyn, the company erected its impressive Sears, Roebuck, and Co. department store in 1932 as an impressive Art Deco design that was all the rage among architects and designers at the time. Its grand opening featured the graceful Eleanor Roosevelt as she addressed the crowd of eager shoppers waiting to rush inside and check it out. The story has it she was the first customer to make a purchase in this store, reportedly buying a pair of baby booties, at least according to the publication made by the Brooklyn Eagle.

In 2012, it became an official landmark. This iconic Flatbush location has seen much in its timeline and endured it all until Sears filed for Chapter 11 bankruptcy protection in 2018. Although not the first Sears department store to close in New York City, it wasn’t immune to the inevitable. On November 24, 2021, the last of the New York City locations shut its doors for good. Transformco, the company this building currently belongs to, has suggested it is a prime candidate for redevelopment. Not even the landmark designation is enough to prevent this iconic building from seeing the possibility of a wrecking crew tearing it down. This Flatbush location was among the first department stores to have a windowless design, allowing for more displays to take up floor space than before.

What made the Bedford location so iconic was the unique characteristics that were featured in the tower of this New York City outlet. The strategy behind the Sears, Roebuck, and Co. signage was to make it stand out as a department store unlike any other.

Further Expansionism

In 1931, Sears created the Allstate Insurance Company. By 1934, there were insurance reps placed in the company’s department stores, making it easier for buyers who bought motorized products from the company to have them insured on the spot. As well as this house-branded insurance company, Sears also has established additional brands such as Craftsman, DieHard, Kenmore, Silvertone, Supertone, and Toughskins. The Sears catalog was the ultimate must-have book among consumers who favored the company and its extensive collection of products. Not only did Sears become popular among Americans, Canadians, and Mexican but it also earned a fan following in the Phillippines after the American troops occupied the nation during World War II. The catalogs that were left behind while they were there were picked up by the locals and they ordered from them.

Adding to the popularity of Sears was the connection they made with rural African Americans that were located in areas during the Jim Crow racial segregation era. The catalogs published by Sears allowed an entire population of people access to goods they otherwise wouldn’t have been able to. Due to the store’s ability to reach so many people, Sears, Roebuck, and Co. wound up raising the eyebrows of the United States Government, along with its list of antitrust laws.

This, however, didn’t stop them. When Sears completed the Sears Tower in Chicago, Illinois in 1974, it was considered the world’s tallest building at one hundred and ten-story floors. Prior to this accomplishment, it was New York City’s Twin Towers that held that title. In 1988, Sears Tower was sold under the agreement it would hold the naming rights of the tower until 2003. As for Sears, the company relocated to Prairie Stone Business Park, Hoffman Estates, Illinois. This is the same location that houses the Sears Centre Arena.

How Times Change

As the size of urban America grew, Sears, Roebuck, and Co. faced stiff competition from city department stores that sought to get their piece of the corporate retail pie. With the rural population not having as much spending power as shoppers dwelling in larger communities, the numerous Sears Department Stores were faced to make some difficult decisions. This was necessary in order to survive as a company.

From 1981 until 1985, Sears looked into pouring more attention into non-retail investments as opposed to staying focused as a retail giant against its competitors. As a result, this has cost them to the point where their Mexican connection includes a renaming of their collection of stores into something else. As of 1990, Walmart had replaced Sears as the largest retailer in both Canada and the United States. Despite this, Sears continues to focus its investment dollars on the financial services sector, which includes Dean Witter Reynolds and Discover Card. However, after selling Homard Development Company to General Growth Properties in 1995, Sears purchased the Orchard Supply Hardware in 1996. In 1997, it began a home improvement store known as The Great Indoors.

In 1993, the very thing that started Sears, Roebuck, and Co. as a company, to begin with, was officially discontinued as a service. The giant catalogs that became a Sears trademark were no longer nearly as effective to win over a consumer as they did in the past, thus becoming obsolete in the eyes of the company. Now with the internet serving as the ultimate catalog to influence people to buy what they do, the multi-page retail bible has become a thing of the past. There are still smaller, product-specialized catalogs in circulation but this is simply a shadow of its former self.

The real decline of Sears, Roebuck, and Co. began in 1992 when the State of California filed a lawsuit against the company. This came about after learning there were false claims of automobiles requiring additional repairs on top of what they were originally brought in for. By 1997, criminal charges were laid out that later witnessed Sears sell the last of its Western Auto shares a year later. It was also in 1997 that Sears sold all but fifteen percent of its Sears Mexico to Grupo Carso. Since then, the Mexican affiliates have been looking to rename its entire roster of store locations to drop the Sears name entirely.

Despite rescue attempts to keep Sears, Roebuck, and Co. going as a retail giant, the company is now a shadow of its former self. When the New York City Sears store closed on November 24, 2021, this served as yet one more bitter pill to swallow for a company that pioneered the retail industry into what it has become today. This New York City location is potentially scheduled to be replaced with new development. What used to be a grand fixture to the Big Apple serves as a reminder that even corporate giants that used to rule the landscape can fall into obscurity as it gets swept under the rug of time. Today, there are only three Sears stores still open in the state of New York. Brooklyn, Massapequa, and Newburgh still have what’s left of what used to be a proud retail chain.

Sources:

source: http://www.searsarchives.com/stores/history_newyork.htm

source: https://untappedcities.com/2016/11/14/a-landmarked-art-deco-sears-roebuck-store-in-flatbush-brooklyn/

source: https://www.history.com/topics/early-20th-century-us/history-of-sears

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