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How business 'that could have been a second Amazon' went from $135,000,000,000 valuation to bankruptcy

Home> Technology> Amazon

Published 17:25 11 Dec 2024 GMT

How business 'that could have been a second Amazon' went from $135,000,000,000 valuation to bankruptcy

Just 10 stores remain today...

Ellie Kemp

Ellie Kemp

A once-popular US department store that could've been as successful as Amazon today instead suffered a brutal decline.

Sears revolutionized American consumer culture, using mail order to sell everything from household goods to auto supplies.

Founded in 1893, its famous catalogues and its expansion to brick-and-mortar stores in 1925 saw business boom.

Sears was once the world's largest retailer, with almost 3,500 stores at its peak.

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By 1972, Sears was valued at $18 billion, which today is worth a huge $135 billion.

Sears used to be the world's largest retailer (AaronP/Bauer-Griffin/GC Images)
Sears used to be the world's largest retailer (AaronP/Bauer-Griffin/GC Images)

In 2018, though, Sears' parent company filed for bankruptcy and now just 10 stores remain.

Where exactly did it all go wrong?

What happened to Sears?

The once-thriving business made a couple of fatal errors over the years, leading to a major decline in sales.

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Which is surprising when you consider that, in 1984, it partnered with IBM to offer online message boards and email services on Prodigy, one of the first ever proto-internet service providers.

E-commerce was never offered - which would've been an absolute game changer, some five years before the World Wide Web was even created.

Ironically, it's this branching out that put Sears on a downward trajectory.

How the mighty have fallen (Tim Boyle/Getty Images)
How the mighty have fallen (Tim Boyle/Getty Images)

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Its infrastructure slowed right down as the company put its attention on other investments, including financial services like credit cards.

And rather than addressing the issue with a much-needed rehaul, the business made cuts instead.

In a move that makes me physically cringe, Sears' axed their catalogue and delivery functions in 1993.

Jeff Bezos then founded Amazon a year later. Yeah...

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In 2005, hedge fund owner Eddie Lampert bought out Sears in a bid to help it compete against competitors in an increasingly difficult market.

Jeff Bezos founded Amazon a year after Sears made major cutbacks (Paul Souders/Getty Images)
Jeff Bezos founded Amazon a year after Sears made major cutbacks (Paul Souders/Getty Images)

Those competitors being absolute giants, like Walmart and, erm, Amazon...

Instead, Sears' sales continued to decline, and the company began closing down more stores.

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To quantify this, sales fell from $43 billion in 2010 to less than $17 billion in 2017.

Hedge fund ESL Investments bought out what was left of the business in 2019 for $5.2 billion.

There are now only 10 Sears stores left in the US as of 2024; four in California, two in Washington, two in Florida, one in Massachusetts and one in Texas.

Featured Image Credit: Eduardo Munoz Alvarez/VIEWpress/Corbis via Getty Images/Scott Olson/Getty Images

Topics: Business, Amazon, History, Shopping

Ellie Kemp
Ellie Kemp

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