The Passing of a Queen

The Sears, Roebuck and Company, founded in 1886, is in trouble.

In the late nineteenth century, the novelty and utility of a mail order catalogue fueled the enormous growth of this revolutionary firm. Largely agrarian America had heretofore shopped in small town general stores with limited selections and relatively high prices. Sears exploited the postal system of the United States to distribute its catalogues, receive completed order forms, and ship the purchased goods to the happy shopper. Imagine Amazon.com at a snail’s pace.

This process may seem absurdly slow, but try to envision the status quo of the time. Instead of a limited range of expensive goods available locally, a world of possibilities was opened. The Sears catalogue, for those who haven’t seen one, offered a veritable cornucopia of goods to isolated farm families. Tools, linens, toys, clothing, and much more. According to the Sears historic archives, specialty catalogues included such items as “bicycles, books, clothing, groceries, pianos and organs, and sewing machines.” To read these catalogues was to dream of a richer existence than the wide, desolate reaches of rural America could offer.

By 1907, the firm had racked up annual sales of $50 million (over $20 billion in current dollars, approximately equal to Dollar General in 2016).

Obviously, an itch had been scratched.

This success translated into the construction of Sears stores in hundreds, then thousands of communities. The Sears Tower in Chicago rose to claim the “world’s tallest building” record for many years. The firm became a conglomerate, acquiring or creating many other concerns including Kmart, Dean Witter, Coldwell Banker, and Allstate Insurance.

But as of 2017, the ride was over. Sears had discontinued their catalogue in 1993, becoming dependent on in-store sales. But waves of competition and technological advances beat on the hapless firm, who just couldn’t seem to catch up. In our visits to a nearby North Attleboro Mall Sears store several years ago, we sensed the end. Shabby and drab, disheveled shelves, dispirited clerks. The success of Amazon and eBay and Walmart had stolen the thunder of this 130 year old queen of retail. God bless her memory, but the tides had turned.

Sears is now closing stores, laying off employees, and selling off well-known brands. Craftsman, the famous marque of life-warranty tools, for instance, has been sold to Black and Decker. There is a real threat that Sears will go bankrupt.

If that happens, thousands more jobs will be lost, hundreds of properties vacated, and stockholder investment reduced to rubble.

It will be a sad end to a wonderful enterprise that brought satisfaction and joy to millions.

But what will happen to the vacant buildings, the sacked employees, and the few remaining investor funds?

The buildings will come to life with economic use of greater utility. According to a recent article in “National Real Estate Investor,” the buildings will be repurposed.

“Office space is a workable solution thanks to usually ample parking space. In addition, in certain cases municipalities have bought the stores from Sears and turned them into charter schools or municipal offices. Community colleges have also picked up some of the properties. That solution works in cases where Sears owns the land the stores are built on. We have also seen the space reconfigured for office space—call centers, medical space (direct primary care, outpatient clinic).”

The workers are another story. Some of the older workers will remain unemployed or decide to retire early. The younger ones will largely find other jobs in going concerns – those more successful than Sears – perhaps in the very businesses mentioned above exploiting the now-vacant Sears locations.

Likewise investor funds, those few returned, will be invested in wiser investments. Perhaps some in the nascent Amazons or Teslas of tomorrow, to reap millions only a decade hence.

This is creative destruction. In a government managed economy, we might try to keep Sears alive, an ultimately wasteful expenditure of taxpayer funds.

But those same taxpayers, in their separate but superior role of free citizen and consumer, have voted to kill Sears. And will vote to support the up and coming competitors who tickle their fancy.

There is wisdom in their vote, something that bureaucracy can’t recreate.

Witness Venezuela.