Companies are disappearing with great regularity. In the five years after a startup, about 50% of American businesses go bankrupt. In the first months of the COVID-19 pandemic, thousands of bars and restaurants closed. However, it is rare for organizations that have been around for decades and have grown into huge operations to disappear.
Businesses that fail after many years often do so because of mismanagement. Another major reason is new and unexpected competition. This factor seems to be seen more and more often in America’s current economy. The advertising business has been turned upside down by Google. TV audiences have been eroded by streaming led by Amazon Prime and Netflix. Slowly, but steadily, the gasoline-powered car industry came into competition with electric cars.
No industry has been more upset by new competition than retail. Physical stores have dominated the industry for centuries. Eventually, people could order items by mail from catalogs, but this method of reaching the customer was still only a modest success, except for Sears which had a large mail order business.
The in-store retail industry has collapsed in many cases because of a single company, Amazon.com. It could push Walmart up as America’s biggest company in terms of revenue this year.
E-commerce has been aided by the COVID-19 pandemic. People forced to stay at home ordered online. Entire national chain stores have been forced to close all of their stores.
The Sears department store chain was founded by Richard Warren Sears and Alvah Curtis Roebuck in 1892. Sears, Roebuck and Co. was the largest retailer in the United States for several years before being adopted by Walmart. Sears merged with Kmart in 2005 to form Sears Holdings. Sears Holdings filed for bankruptcy in 2018. According to the most recent information, it has 29 stores left. No one would be surprised to see them disappear.
What happened to Sears? Some could have been predicted. Entire industries have already been disrupted by new business models. Any industry leader who doesn’t invest in “the next big thing” may be overwhelmed by this one. In the case of Sears, that “thing” was e-commerce. After pioneering distance selling through the catalog, Sears should have been at the forefront of out-of-store sales.
In addition, there are many indications that Sears has gone greedy. It left the stores to age and decay. It didn’t diversify into new lines of merchandise like Walmart did. In the final analysis, Sears took it easy and suffered blow after blow until it could no longer survive.
Click here to read the brands that have disappeared over the past decade