2023 could be the year that Sears closes its doors forever in the US. In Mexico the situation can be summed up in two simple but powerful words: Carlos Slim.
On Monday, October 15, 2018, Sears Holdings filed for bankruptcy protection under Chapter 11 of US bankruptcy law. Eddie Lampert, the 125-year-old CEO of the company, would retire from his position. In that week, Sears should have paid off a debt of $134 million , but it did not have enough capital to cover it.
The chain ‘s demise has been in the making for many years; has continuously closed stores since that October 2018. However, 2023 could be the year the iconic retailer officially closes its doors for good.
The announced death of a retail legend
According to Peter Varadi, a retail expert and CEO of Market Gap Pro, the company decided to sell parts of itself to help generate revenue and diversify its cash flow, but to no avail.
The specialist remarked to the Best Life site that Sears has not made annual profits since 2011.
For example, on December 13 last year, Sears Hometown, a subsidiary of the department store giant, also filed for bankruptcy, closing 115 stores.
According to CNN , the company has just 121 stores left in the United States, when it operated more than 700 at its peak. Parent company Sears has only 21 brick-and-mortar locations left , nothing compared to the 3,500 stores it had at its peak when it merged with the KMart chain .
Crisis in Mexico? The name that avoids it: Carlos Slim
Although the brand in the United States is on the verge of collapse, in Mexico the chain is far from the crisis of its American sister because it has been under the control of Grupo Sanborns , a firm of Carlos Slim , for 20 years.
Sears first went international in 1947 when it opened its first store outside the United States in Mexico City. Grupo Carso bought a 99% equity stake in Sears Mexico from Sears Roebuck (the US subsidiary) in 2016.
Since then, Sears Mexico has operated independently of the US firm and the capital of Slim, the richest man in Mexico, and his business group have kept the retail giant in Latin America away from the crisis.
The Expansión site exemplifies it this way: while the Sears Roebuck company closed 70% of its stores in the American Union in the last 10 years, Sears Mexico went from having 40 stores to 95 in just two decades.
In addition, the Mexican business site points out, while Sear Roebuck has not registered a profit since 2011, Grupo Sanborns’ revenues have grown an average of 6% per year.
The store that changed the way of doing retail
Whatever the fate of the store in the United States with this bankruptcy filing, there is no denying that this brand shaped the way modern retail is done.
Here are 13 facts you may not know about this iconic retail brand.
1. While technically starting out as the Sears, Roebuck and Company brand name in 1893 in Chicago, Illinois, the firm got its start in 1886 as the RW Sears Watch Company, with founder Richard W. Sears, a former railroad station agent who he sold watches by mail order in Minneapolis with watchmaker Alvah Roebuck.
2. Sears catalogs were able to have such a prodigious reach thanks in part to a US government program called Rural Free Delivery , which brought mail routes to rural parts of the country.
3. The retail chain ‘s first brick-and-mortar store opened in Chicago in 1925 to capitalize on the boom in automobile use, allowing many customers in rural and suburban areas to shop in metropolitan centers.
4. From 1920 to 1943, Sears owned the Encyclopedia Britannica and sold these reference books in catalogues.
5. The iconic Sears catalog went by various names, first called “The Book of Deals,” then “The Great Price Maker,” and finally the “Book of Wish.” At times, the catalogs could have up to 500 pages.
6. In the 1950s, Sears stores exceeded 700 stores and the company went international, first opening a branch in Mexico in 1947 and then in Canada in 1952.
7. The Sears Tower, opened in 1973 and renamed the Willis Tower in 2009, was the tallest building in the world until 1998.
8. In the 1980s, in partnership with IBM, Sears created Prodigy , one of the first home Internet platforms.