Executive Briefings

The Big Missteps That Brought an American Retail Icon to the Edge of Collapse

Walk into a Sears these days, and you'll see an icon of American retailing collapsing before your eyes.

The Big Missteps That Brought an American Retail Icon to the Edge of Collapse

On a May visit to the Falls Church store, the floors in the refrigerator aisles were splotched with brown stains. Over by the exercise equipment, the walls were scuffed and had wires hanging out of them. There were empty shelves in the shoe department. And in the tools section. And the men's clothing area.

The place is in decay — much like Sears's once-dominant business model.

After six straight years of plunging sales and financial losses, the company is shuttering stores and selling off crown jewels, such as its Craftsman tools line.

Decades of missed opportunities have brought Sears to this. It lost its focus with ventures into Discover credit cards and Coldwell Banker real estate in an attempt to diversify. Then big boxes such as Home Depot and Best Buy chipped away at lucrative product niches. But maybe the biggest whiff: Executives knew as far back as the early 1990s that they had to wean Sears off its dependency on shopping malls — but its many forays into other store formats never quite worked.

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On a May visit to the Falls Church store, the floors in the refrigerator aisles were splotched with brown stains. Over by the exercise equipment, the walls were scuffed and had wires hanging out of them. There were empty shelves in the shoe department. And in the tools section. And the men's clothing area.

The place is in decay — much like Sears's once-dominant business model.

After six straight years of plunging sales and financial losses, the company is shuttering stores and selling off crown jewels, such as its Craftsman tools line.

Decades of missed opportunities have brought Sears to this. It lost its focus with ventures into Discover credit cards and Coldwell Banker real estate in an attempt to diversify. Then big boxes such as Home Depot and Best Buy chipped away at lucrative product niches. But maybe the biggest whiff: Executives knew as far back as the early 1990s that they had to wean Sears off its dependency on shopping malls — but its many forays into other store formats never quite worked.

Read Full Article

The Big Missteps That Brought an American Retail Icon to the Edge of Collapse