Honestly, it’s still hard to wrap your head around how a company that literally taught America how to shop ended up as a punchline. For over a century, the Sears catalog—the "Wish Book"—was the closest thing we had to the internet. If you wanted a toaster, a dress, or even a literal DIY kit for a whole house, you went to Sears. Then, the wheels didn't just come off; the entire axle snapped.
People love to blame Amazon. Sure, Jeff Bezos didn't help, but the decay started way before the first Prime van hit the road. If you're looking for the real dirt, there’s a small library of books about the many mistakes sears made that dissect the hubris, the weird internal wars, and the financial "genius" that eventually led to the 2018 bankruptcy.
The Hedge Fund King and the Hunger Games Internal Strategy
One name dominates the modern post-mortem of Sears: Eddie Lampert. If you want the definitive look at the later years, you've gotta check out how his hedge fund mentality essentially cannibalized the stores.
In many business circles, the go-to reference is actually a chapter in "The New Rules of Retail" by Robin Lewis and Michael Dart. They break down how Sears stopped being a retailer and started being a real estate play. But the most "you can't make this up" detail they cover is the SOAR strategy.
Lampert basically split the company into 30+ separate units—like appliances, tools, and clothing—and made them compete for resources. It sounds like a smart, Darwinian market approach on paper. In reality? It was a disaster.
- The tool department would fight the appliance department.
- They’d refuse to share floor space or marketing budgets.
- Executives were incentivized to sabotage other departments to make their own look better.
It was basically The Hunger Games but with Kenmore washing machines and DieHard batteries. Instead of fighting Walmart, they were busy stabbing each other in the back in the Hoffman Estates headquarters.
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Why the Catalog Wasn't the Internet (Even Though It Should’ve Been)
There’s a common myth that Sears just "forgot" to go online. That’s actually not true. In the book "Quit: The Power of Knowing When to Walk Away", Annie Duke uses Sears as a case study for why sticking to your guns can be a death sentence.
Sears was actually an early partner in Prodigy, an online service from the 80s and 90s that predated the modern web. They had the infrastructure. They had the shipping logistics. They had the data.
But they were terrified of cannibalizing their brick-and-mortar stores. They saw the internet as a threat to the mall culture they’d spent billions building. By the time they realized the mall was dying, the ship had already sailed, hit an iceberg, and was halfway to the bottom of the Atlantic.
The "Sears Tower" Hubris
You also can't ignore the symbolic mistakes. "Sears: The Demise of an American Icon" (a Harvard Business School case study by Kristin Mugford) points out that the very moment Sears peaked was the moment it started to rot.
In 1973, they finished the Sears Tower. It was the tallest building in the world. But while they were literally building a monument to themselves in Chicago, they were losing the ground war in the suburbs. Walmart and Target were moving in with lower prices and better inventory management. Sears was too busy being "The Greatest" to notice they were becoming "The Most Expensive and Least Convenient."
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Buying Everything Except a Future
One of the weirdest chapters in the books about the many mistakes sears made involves their obsession with diversification. They bought Allstate (insurance), Dean Witter (stock brokerage), and Coldwell Banker (real estate).
The idea was "Socks and Stocks." You’d buy your kid's school clothes and then go across the aisle to buy a mutual fund.
It didn't work. It distracted the management from the fact that the actual stores were becoming dingy, the lighting was terrible, and the "Craftsman" name wasn't enough to keep people coming back. When the retail side started bleeding cash, they had to sell off the profitable financial companies just to keep the lights on in the stores. It was like selling your organs to pay for a haircut.
The Decay You Could See (and Smell)
If you walked into a Sears in 2015, you knew it was over. The stores were famously underfunded. While Target was spending billions to make their stores look like boutiques, Lampert was spending the bare minimum.
Experts like Barbara Kahn in "The Shopping Revolution" point out that retail is about experience. Sears had:
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- Handwritten signs because they couldn't afford new ones.
- Leaky roofs.
- Bare shelves.
- Employees who were basically waiting for the "Going Out of Business" signs to arrive.
The Actionable Lessons for Your Own Business
Sears isn't just a sad story for boomers; it’s a warning. If you’re running a business, here is what you should take away from this mess:
- Internal Competition is Toxic: If your teams are fighting each other for "points" or budget, they aren't fighting your competitors. Alignment is everything.
- Don't Let Your Past Success Blind You: Sears thought their brand was "too big to fail." No brand is. The moment you stop worrying about the customer experience is the moment you start dying.
- Real Estate Isn't Retail: You can have the best locations in the world, but if what’s inside the building is boring or overpriced, people will stay in their cars and keep driving to the next exit.
- Reinvest or Perish: You cannot "cut" your way to growth. Sears tried to save money by not cleaning the carpets or fixing the AC. All they did was tell the customers, "We don't care about you," and the customers listened.
If you want to understand the full tragedy, start with the Robin Lewis book. It’s the most scathing and accurate look at how a hedge fund mindset can absolutely gut a legacy brand from the inside out.
The story of Sears is basically a 130-year lesson in what happens when you stop being a merchant and start being a spreadsheet. By the time they realized people wanted more than just a "Wish Book" memory, there was nothing left but the real estate.
Next Steps for Deeper Insight
If you want to see exactly how the financial side fell apart, I can help you find specific white papers on the Sears-Kmart merger or break down the Eddie Lampert ESL Investments legal filings that show where the money actually went during the bankruptcy.