A Not-So-Fond Farewell
to Sears
By Phil Mattera for
the Dirt
Diggers Digest
The bankruptcy filing, store closings and general uncertainty surrounding the future of Sears have prompted a spate of nostalgic business-page articles about the history of the once dominant retailer.
Whether or not the chain survives, it is important not to sugarcoat its past.
Sears, along with
Montgomery Ward, brought the joys of mass-produced merchandise to rural
America.
Yet its mail-order operations undermined local merchants and initiated the long-term decline of traditional main street life.
Sears’ hyper-efficient system for fulfilling mail orders, using conveyor belts and pneumatic tubes, was said to have helped inspire Henry Ford’s automobile assembly line with its mixed blessings.
Yet its mail-order operations undermined local merchants and initiated the long-term decline of traditional main street life.
Sears’ hyper-efficient system for fulfilling mail orders, using conveyor belts and pneumatic tubes, was said to have helped inspire Henry Ford’s automobile assembly line with its mixed blessings.
Sears began opening
retail stores in the 1920s, and in the postwar period it played a major role in
automobile-focused suburbanization and its attendant social and environmental
impacts.
The company would later extract a $242 million subsidy package to relocate its headquarters from downtown Chicago to exurban Hoffman Estates after threatening to move out of state.
The company would later extract a $242 million subsidy package to relocate its headquarters from downtown Chicago to exurban Hoffman Estates after threatening to move out of state.
In the 1980s Sears was
one of the prime examples of wrong-headed diversification as it acquired the
Dean Witter brokerage house and the Coldwell Banker chain of real estate
agencies, and then introduced the Discover credit card. During the 1990s Sears
had to dispose of all those businesses, along with its Allstate insurance
operation.
In 2005 Sears suffered the indignity of being combined with Kmart by private equity operator Edward Lampert, who believed he could solve the longstanding problems of the two chains but instead ended up simply stretching out their death spiral.
Sears had long
resisted unionization of its stores, but it adopted paternalistic practices
such as profit-sharing that partly substituted for collective bargaining.
During the Lampert era there has been little paternalism.
Instead, workers at Sears and Kmart have frequently found themselves the victims of abusive labor practices.
Instead, workers at Sears and Kmart have frequently found themselves the victims of abusive labor practices.
Since 2007 the two
chains have been implicated in nine collective action wage theft lawsuits and
have had to pay out more than $56 million in settlements and damages –
more than any other broadline retailer except Walmart.
During the Lampert era
the two chains have also been cited more than 50 times by OSHA for workplace
safety and health abuses, paying some $600,000 in fines.
They have also been involved in five cases with the Equal Employment Opportunity Commission, including one in which Sears had to pay $6.2 million in 2010 to settle allegations of widespread violations of the Americans with Disabilities Act.
They have also been involved in five cases with the Equal Employment Opportunity Commission, including one in which Sears had to pay $6.2 million in 2010 to settle allegations of widespread violations of the Americans with Disabilities Act.
Sears has also gotten
into trouble in its dealings with the federal government. In 2017 Kmart had to
pay $32.3 million to resolve allegations that
its in-house pharmacies violated the False Claims Act by overbilling federal
health programs when filling prescriptions for generic drugs.
Sears has played a
significant role in the history of American retailing, but it has not always
been a positive one. Now that its days appear to be numbered, we can focus our
attention on the newer generation of bad actors, such as Amazon, that now
dominate the system in which we obtain the necessities of everyday life.