Introducing Who Killed Sears & Kmart?
A series on what took down two well-known retailers.
For over a century, Sears was one of this nation’s leading retailers. In the 1920s, you could literally buy a house from Sears. The postwar years saw Sears moving into malls across the land. KMart started in 1962, the same year two other discount retailers, Target and Walmart opened their doors. Throughout the 1970s and 80s, KMart was the go-to place for finding things at a good price. Growing up in the 1970s and 80s, I can remember going into Kmarts where my parents could find things at a great price. I loved eating Kmart’s famous sub sandwiches. My parents bought Kenmore appliances at Sears which I did when I grew up. Shoppers were on the lookout for their famous blue light specials. The two companies started to slip in the 90s, but they were still king of their retail segment. In 2005 Sears and Kmart merged to create Sears Holdings.
But then something happened. Since that merger, hundreds of stores were closed, tens of thousands were laid off. What were two of the largest chains in the country, are now basically defunct.
How did this happen?
The common story is that Sears and Kmart didn’t keep up with the times and they couldn’t compete with Amazon. Now the online retail behemoth does have a role in the demise of Sears, but it's only a small role. Actually, the reason Sears and Kmart have vanished from American retail is because of one man- the one-time CEO of Sears Holdings, Eddie Lampert. This is a saga that very few know.
I’ve had an odd obsession with the downfall of Sears and Kmart for quite some time, reading an odd story here and there that followed what Lampert was doing to the stores. But for the most part, the media ignored the story. It gave Lampert the perfect cover to do decimate Sears Holdings, putting thousands of employees out of work.
“When Eddie Lampert bought Sears in 2000 and then he bought Kmart in 2005, they were both declining, but both were still pretty good businesses. They had about 3500 stores between the two of them. There were a lot of opportunities there, they had loyal customers,” said Warren Shouldberg, a retail journalist that has followed the downfall of Sears in a recent interview. Shoulberg goes on to explain what Lampert has done to Sears. “His strategy from the very beginning was to pull cash out of that business. It was not to run the business because if it had been to run the businesses, we would have seen very different activities, but instead, they kept selling real estate.” Shoulberg says. “It wasn’t just real estate they sold, they sold brand names (think Lands End and Craftsman), they stopped investing in their stores.
This is a story that I felt needed to be shared and I remember contacting reporters to really cover this story. No one ever took it on save a few journalists here and there.
“This was just a real estate play to sell off real estate assets,” said Shoulberg. “It was to keep spending to a minimum and keep drawing cash out of those businesses that went back to the shareholders of which Lampert was the biggest shareholder, he had 50% of the company,” Shoulberg states.
So, I decided to write my own stories on Sears and Kmart. While I was trained as a journalist, I’m not a professional- I just took some of what I learned in college in the hope to get people to pay attention to a wrong. I wanted to show how greed and incompetence are part of the reason two famous brands have been destroyed. What is happening to Sears is what is going on in the larger economy.
Since 2017, I’ve written articles on Medium about the demise of these two retailers. I’ve decided to repost them here on Substack in order for them to get more exposure and maybe in the vain attempt that something good can happen.
These stories might be too late in saving Kmart or Sears, but I hope they can shed a light on how Big Finance is leaving consumers with less choice and thousands without good jobs. I also hope it might cause the media to look into this more deeply in order to hold those responsible to account. Please read these stories and then share them with others who need to hear the story of who killed Sears and Kmart. Thanks in advance.
Who Killed Sears and Kmart Series: