How much of Sears's demise was due to Walmart? It's not like retail completely died.
The home improvement chains hurt them too, once they started selling tools and appliances.
We bought everything at Sears in the 80's. Electronics (including computers), appliances, toys, clothes, tools, lawn and garden...
Was Sears too 'friendly' with their suppliers? When I worked at Sears at the end of the 1990's (the store was a ghost town then), many of the long-time employees were making pretty decent money. Way more than people at Best Buy, Target or Walmart made. Plus actual benefits. The must have had huge legacy costs, especially at the higher levels.
Sears also just wasn't able to get how to move its catalog online. My parents purchased a house that was mostly built with Sears appliances and furniture (cabinets, counters, etc). Ordering replacement parts from Sears was a chore; you were constantly moved around to tons of different domains, some of which weren't even made human readable; their inventory system was terrible, making it impossible to find the parts based on absolutely any serial or identifier included on the appliance itself.
Their warehouse and delivery was atrocious, first sending us the wrong stove top glass multiple times, then finally realizing they didn't have our model in stock and wouldn't for months. Months later, they sent us the top finally, but 3 of them. And then tried to ask us to pay to send the 2 they accidentally sent back.
Sears either never took the time to figure out how to use online or weren't interested. For a very long time, due to custom printing, you could get semi-permanent Sears URLs to rather vulgar images on shirts, pillows, blankets, etc.
They just weren't ready for online and didn't take the time to learn it. Once they finally got a site up and running, it was just too late.
Sears is arguably a good example of how execution (and culture) often trump strategy. They were online. They invested in Prodigy. But their heart never really seemed to be in it and they never really changed the way they operated based on online.
I would spin culture the other way too. Sears was a more premium company. They had commission salesmen working the floors. (I think it was as recently as like 2010ish, I walked in to one and looked too long at something was was swarmed) You didn't go there for the "lowest price" you went there for good stuff and when you bought something big they helped you figure it out, they'd show you a dozen fridges, maybe with features you'd never seen before, and by the end of the day try to talk you in to a stove and dishwasher to go with the one you landed on and then have someone bring it over, install it and take your old stuff away. They had house brands: Craftsman, Diehard, Kenmore that were legit and made legit stuff; it wasn't the highest end stuff but it wasn't just the cheapest stuff they could label. I don't think it was possible for them to compete for low margins like Walmart or Amazon, it just wasn't "Sears." Prodigy was expensive, the few things you could order there had extra costs associated with it, I don't fully remember but I think you had to actually pay a premium for the experience to order it on prodigy and then you paid shipping costs and everything. It's not simply just buying and selling stuff online and it shows up, price matters and people buy big stuff differently than they did 40 years ago, they know way more about it before they go to the store now because of the internet.
I'm sure there will be plenty of books about it all when it's said and done and I'm sure there is a list of mistakes that is unimaginably long. I doubt Sears could have been saved though, it wouldn't have been "Sears" any more.
It is odd, at least to me, Sears is this nostalgia thing. Looking at the catalog as a child, playing with Prodigy way way back when. I've read maybe a dozen articles on the place here on HN over the last decade. I haven't been in one in nearly as long. I think I've known they were totally doomed for as long but in some part of my brain it was impossible for it to unfold exactly as it has. It's just been a train wreck in ultra-slow-motion. They seemed to have had so many resources they could have used to try things, they just couldn't actually try them.
Reading this, it makes it seem that Sears died because the middle class died. Why did people ditch this middle-of-the-road experience for the cheaper one? Because they were forced to.
People ditched the middle-of-the-road experience because the cheaper experience wasn't an option. Would I buy things for more money if there were no Walmart? Sure. But, for many things, I'll buy at Walmart given the option. Even middle class people like to save money and the value add from more expensive shops often isn't worth the price.
Executives see a million trends come and go. Thay pay lip service so they don't sound outdated, but they have too many friends that drank the kool-aid and went down in flames on fads they came and went.
And then just one more in the pile with this "online" thing. And like all the others, it came and went.... oh wait... it came and stayed? It came and grew!? It came and destroyed !?? Well I guess you can't call them all.
>For a very long time, due to custom printing, you could get semi-permanent Sears URLs to rather vulgar images on shirts, pillows, blankets, etc.
I'm not sure I understand that, could you please elaborate? Are you saying that they provided custom printing, then some users printed vulgar images, and could pass on URLs for others to print another batch?
Exactly. You could upload an image for custom printing, with no sanity check as to what the image was, and it would be available for others to access as well, resulting in a semi-permanent link to hentai, porn, and extreme profanity. I imagine the justification behind it was that in order to do the custom print at the lower price, Sears had to buy a larger order, but I have no idea.
It's all about real estate and moving tax writeoffs around.
Big box is all about "financial innovations" that juice up financial statements.
Sears owned everything and had to carry most of the costs. Big box retailers like WalMart own as as little as possible, there are a thousand LLCs, trusts, etc that hold the big fixed assets like stores, etc. None of the big retailers own much of anything.
Doing this allows them to operationalize most of their costs. Instead of depreciating a building over 30 years, they write-off all of the value of leasing the building from some other entity. (ie. Store #5622, LLC) It's also a big part of why strip malls have a short shelf life. A dead strip mall with a Tae Kwon Do studio is a depreciated asset that exists to lose money for someone to write off a profitable one.
It works well as long as they hit the growth targets. When these operators miss the mark, even for a short time, you end up with a RiteAid or Linens n Things scenario where the numbers don't add up, and everything goes "poof".
That smells like Hollywood accounting to me. Or at least abuse of tax law that locks away a potential asset for someone else in order to be able to get out of paying a tax.
Admittedly, I'm still working on wrapping my head around the entire accounting thing, but in general, any material you acquire should be acquired with intent to do something with it. Unless this is some sort of economic "fallowing" technique. But I'm still not sure I'd buy any logic that tried to paint that behavior as anything other than glorified "domain squatting" on a community.
I've always heard it explained as a problem of margins and inventory. Sears would turn over their inventory 4x a year with a 30% margin. Walmart would turn it over 8x a year with a 15% margin. The "discount retail" approach worked really well because customers saw the lower prices. Walmart had a world class logistics organization, and made smarter decisions about what products to stock.
I'm not sure where I read this but it may have been Clayton Christensen, or Shark Tank ^_^. In the context of disruption, Sears was making the right decision in chasing the higher margins.
I would not focus on one competitor. Sears sank themselves. They had everything, more so than JC Penny, but they were also heavily invested in mall locations which as the people spread out the mall orientation hamstrung them. Wal-Mart, Target, Best Buy, and more, were in strip malls everywhere and everywhere usually meant closer to you.
Sears could have put some of that aside with a better and stronger online presence but unless they decided to wholly shift to that medium they had to get out of the big monolithic type malls and into the more in number strip malls.
One of Sears remaining valuable assets, though, is the real estate left over from its standalone stores. That's one of the bones that the creditors are salivating over.
What is it that makes the real estate valuable though? A mall with a big hole in it doesn't seem like a good investment. If Sears couldn't make a go of it it's hard to see how anybody else could.
A mall with a big hole in it doesn't seem like a good investment.
As specified in the comment, not mall locations. Those were rented from mall owners. But Sears had/had many many standalone stores.
Many of those stores were built in urban neighborhoods at a time when city neighborhoods were thriving. Now those properties are gaining value again as more people move into cities.
Also, the Sears Auto Care locations are supposed to be doing well financially, and tend to be located in desirable locations.
I guess I've been living in the suburbs too long. Your comment reminded me of the perfect example, the store where my dad worked - a block away from the Minnesota State Capitol building.
How is this a business? I’m not tuned in to the preppier community but from what I gather they would not be huge fans of rushing to a centralized location in an emergency. Also they’re a tiny market.
No, this was true when Sears was viable retailer. They owned very valuable properties in malls. But the process of destroying the retail portion of the company to extract value from the real estate actually devalued the property. Sears was the anchor that made a lot of that property valuable in the first place.
It's a good example to those that claim companies should pay employees liberally. Unless you're in a niche that people are willing to pay a margin for or serve upscale customers who also don't mind paying margins (Costco, Whole Foods, Nordstroms, Apple, etc), then you're going to lose business to competitors offering lower prices.
In this situation, the only way to improve the well being of those whose labor isn't as valuable is to restrict their supply, either by educating them to give them other valuable skills or providing paid leaves so they can go on vacations and forcing employers to hire more people. All of this extra wealth for those at the bottom would, of course, have to come from the margins those at the top are earning.
I am extremely wary of n=1 reasoning. It ends us being confirmation bias. We look at Sears, note that they pay more than Walmart, and say that paying employees more either has no effect, or is harmful.
But are we also looking at the thousands of businesses that pay their employees terrible wages, but go out of business?
Businesses are complex systems that defy the search for simple explanations. That won't stop humans from trying, though. We all love the idea that there is some simple Eureka! idea that explains everything.
In this specific case you're talking about wages as if all other things are equal. All other things being equal, if we pay employees more, we lose business to lower-cost competitors that pay employees less.
This is like saying that if all other things are equal, a restaurant that pays more for its ingredients will lose business to competitors that pay less.
Of course, as managers, our entire reason for existence is to make sure that all other things are not equal. If we pay more for ingredients, we have to build our business around turning those more expensive ingredients into a better customer experience and perception of value.
And the same goes for paying more in wages. It's our business as managers to turn that into value. If we can't, are the wages the problem? Or is our mismanagement the problem?
Looking at the comments about shopping at Sears, I am not seeing a lot of "Everything about Sears was great except things cost a few cents more." I'm seeing anecdote after anecdote about how poorly it was managed.
Under the circumstances, if I wanted to cut wages at Sears, I would have started with their managers. If they're going to manage the thing into the ground, why pay them more than you'd pay an intern in an MBA program?
This reminds me about a recent Freakonomics podcast about Trader Joe's. It starts off by asking, what would you think about a grocery store with no name brands, much fewer options, no sales on items, not loyalty program, no automated checkout, no large social media presence, no large advertising budget, etc? A lot of it sounds bad, but Trader Joe's is really successful.
If a restaurant is located in an area that has no customers interested in better ingredients or food, then it will lose business to competitors. And Sears' customer experience has been terrible for a couple decades, but from all accounts I've heard it was great in its heyday. What changed, and this is my conjecture of course, is the introduction lower cost options such as Walmart, Home Depot, Amazon, etc, that revealed that Sears' clientele were not willing to pay a premium for their products in exchange for whatever extra Sears was offering (in this case I'm assuming better staff at the stores via Sears offering better pay and benefits).
> Sears' customer service has been terrible for a couple decades, but [...] was great in its heyday.
Wouldn't "worse customer service" be the change that allowed other retailers to eat Sears' lunch, then? You say Sears' clientele were not willing to pay a premium for whatever extra Sears was offering, but by your own words they haven't actually offered anything premium for a long time.
More expensive and better is a viable value prop; more expensive and worse is not.
Yes, but I think it takes a while to switch a company's atmosphere, and they also have or had a ton of defined benefit pension liabilities on the books that other retailers didn't.
Sears catered to the giant American middle class, and while I'm sure that mismanagement was a huge part of its demise, I also think the declining spending power of the American middle class also contributed.
> This is like saying that if all other things are equal, a restaurant that pays more for its ingredients will lose business to competitors that pay less.
Well, isn’t that one also true? There are limits and exceptions, obviously, but yeah, I’m pretty sure there is a strong correlation between the cost (cheapness) of ingredients and total sales.
Actually, there is not a simple correlation between just one of your costs and total sales. In retail, for example, location cannot be ignored. Likewise, there is an awful lot of work that has to go into being the low-cost leader.
Amazon and WalMart are good examples of this. They don't just cut one cost and wait for the money to flow in. They build their entire business around leveraging low-cost, in ways that are extraordinarily difficult to copy.
It's not as simple as, "Pay less wages, cut prices by a few cents, but keep doing everything else the same," any more than running a fast food restaurant is about buying cheaper ingredients and "passing the savings along to diners."
> It's a good example to those that claim companies should pay employees liberally.
Is it? Paying employees well isn't what killed Sears. Sears has been a ghost town for years, and anyone who's been in one in the past 20 years can probably tell you why. The customer experience simply sucks. Help is hard to find, checkout is slow, their warranties are garbage and a pain to exercise, and their once-great store brands have been either penny-pinched into mediocrity or sold off.
For me, this is it in a nutshell. I worked next door (as in a 30 foot walk) from a Sears and popped in to quickly grab a couple things in a 30 minute gap between meetings. In 10 minutes, I had what I wanted, and got in line to checkout. I was the 6th person in line...and eventually put my stuff down and walked out because I still hadn't managed to check out 20 minutes later. There was only one employee handling checkout, and that employee was moving at a slower-than-glacial pace. Even though several other employees were milling around the various departments, no one came over to help.
There are a lot of reasons Sears failed, but for me, making the most painful part of the process the part WHERE I GIVE THEM MONEY, was the last straw.
I should have wrote that it's just one factor, but at the end of the day, people opted for lower priced goods rather than the service that Sears offered, which I assume was partly due to the decent compensation they provided.
Another example of a low wage industry where paying employees more doesn't work in the grand scheme are hotels. People like to stay in newer, renovated, upscale hotels. Well if one hotel pays more than it has to, then it's owners save less capital with which they can purchase other land and build a new hotel on, or to renovate an existing one. So the hotel owners that pay the employees as little as possible and work them as much as possible end up with more money to invest in new builds or renovations, and customers end up going to those hotels, while the hotel that paid its employees well will lose business.
Unfortunately, good customer service only goes so far, especially when your clientele can barely afford it and they readily chose to forego it to save money.
Counter-example for basically everything you said: Trader Joe's.
Sears used to be like Trader Joe's: customer service was great, the best products were the house brands, and if you weren't satisfied, you walked back in and got a new one or a refund.
Then Sears' new management went off in pursuit of higher profits and killed everything.
I agree that Sears' management has been terrible, but also think that Sears' customers stopped being able to pay the premium for their American made Craftsman tools and knowledgeable employees.
Trader Joes are usually located in areas that have higher income and more young people. They do offer good customer service, but I also don't think Trader Joes could cater to as many people as Sears', and Sears stores and inventory seem much more costly to operate.
> but at the end of the day, people opted for lower priced goods rather than the service that Sears offered, which I assume was partly due to the decent compensation they provided.
Huh? The parent commenter was just describing how poor the service was at Sears stores.
Costco's average customer is definitely higher income than the average American, although I've seen different attempts to quantify this. The first result from a Google search gives me this: https://www.fool.com/investing/2016/06/17/who-is-costcos-fav...
A couple of factors act as a "filter" that makes Costco less worthwhile for lower income shoppers:
- Buying in bulk requires a bunch of cash up front, which not everyone has.
- Buying in bulk normally works best for families, and individuals with families have higher average incomes than those that don't.
- Costco stocks almost exclusively mid- to high-quality food and products. Shoppers may be able to have a lower grocery bill by buying lower-quality store-brand products elsewhere.
There are obviously individual exceptions, but these factors drive up the average income of a Costco shopper.
In Chicago a Costco membership is worth it just for the gas. It's usually at least 50 cents per gallon less expensive than nearby stations. I have no idea how they do that.
Also, for new parents: you can easily save the cost of the membership on diapers and wipes for the year or so your child wears them.
They always have a car parked in front or by the customer service center to advertise their auto purchase program. It has almost always been a Lexus, but for the past few months the one near me is a Maserati. I think this may be their signal on who their ideal customer is. Yet my parents used it to buy a Subaru and it was a good deal.
Costco loves the concept of price anchoring. That's why the diamond rings and tvs are right near the front, and their liquor isle has $1,000 bottles.
The concept is that when you decide against buying the $1,000 thing, the $50 thing seems a good comprise. If all you had were $10 things, the $50 thing would seem to be 'too much'.
Costco makes ~75% of their profit from memberships, gas is like their iconic $5 rotisserie chicken - sell it at cost or a small loss as a incentive to buy and maintain membership. Gas prices are posted outside so it's a particularity public ad for costco membership and as such they have a strong incentive to push the price as low as feasible.
With sufficiently stable social circles (also not available to everyone, but at least not an identical requirement) you could replace storage with distribution.
This was years ago so I don’t have a reference. But one of my business professors in college assigned a case study that contained the memorable (to me) stat that the average Costco shopper had a higher net worth than the average Nordstrom shopper. Something to do with small business owners vs people going into debt to look more affluent than they really are...
Shopping at Costco is often a wise financial decision, and hence people who shop at Costco tend to be the type of people who make wise financial decisions, and the net result of making wise financial decisions is a higher net worth.
Costco does sell in bulk but it's not a Family Dollar. It's for the middle class to save some on their name brand groceries because they can afford to pay more at the register to go a little longer between trips to the store. It's not really aimed at people that can barely afford to shop at the discount Aldi every few days because they can't pool enough money together for a biweekly Costco trip.
They are. You need to have a good amount of extra money to afford the membership and the cost of buying 6 months of toilet paper in advance. Those are cheap items that you will need, if you are not poor you probably don't even think about it. However when you are poor it doesn't matter if it is cheaper or not to buy in bulk because you don't have the cash to afford it. (you also are unlikely to have the storage space for all of that)
Do not forget about ALDI - it is cheaper than Costco, does not require buying in bulk, but the quality is stable and generally well worth the money. ALDI is the place to go for the working class.
Upper class? It's true that those living in poverty often don't have the means to buy in bulk or pay a Costco membership, but I don't think the designation of "upscale" describes the store either. Many working class and middle class people shop there.
Upper class is a bad descriptor, and many working class people do shop there, but I think Costco does have a bit of an upscale connotation. A different one than whole foods or a natural food co-op, but I think it still has one. It's not the "normal" grocer.
This basically renders your point meaningless, since now literally all businesses in the US are servicing the upper class.
There's relative poverty in the US still. Currency still has relative purchasing power. Saying a person living below the US poverty line should be put in the same class (upper class) as Jeff Bezos seems disingenuous as best.
Don't know about "upper" class, but definitely middle class. A lot of things at Costco (at least where I live) are only available in organic formats, for example, which jack up the price for no real benefit (imo). The working poor don't usually have the flexibility to do these kinds of things.
I've known plenty of people on various levels of welfare support who would shop at costco/sam's club. They got their support once a month, making a big shopping trip perfectly in reach. The busiest Costco locations I've been to have been the lower income areas of town (Phoenix area).
Membership at Costco is like 60 dollars a year. Not saying it's doable for everyone but its hardly something 'you need to have a good amount of extra money' to afford.
> Membership at Costco is like 60 dollars a year. Not saying it's doable for everyone but its hardly something 'you need to have a good amount of extra money' to afford
If you are poor to the point of relying on public assistance to meet basic needs, an extra $60 up front even if it will pay off over a year means foregoing other essential expenses now.
But the bigger cost in many parts of the country is the space needed for inventory to maximize the benefit of bulk purchasing. Sure it works well for my family, but we live in a decent sized suburban home with an second refrigerator, and a storage closet converted for additional pantry space.
Why do you think I was talking about people who are poor to the point that they are relying on public assistance? Did you gloss over the part where I said 'not saying it is doable for everyone'? You even quoted it. This thread was debating whether or not Costco is an 'upscale' place that only the well to do can afford, not whether or not Costco is an option for people on public assistance.
If you look at the locations of Costcos in any metropolitan area, they will not be near the poorer areas. Walmart is more frequently located near poorer areas, and what I was getting at, was that Walmart can't just up its pay to match Costco because many people that shop at Walmart don't have any extra money, whereas Costco can afford to raise prices to help pay for better wages.
You can also get the $120 membership that gives you a percentage back. If you shop there regularly the membership becomes effectively free. But this doesn't help someone living paycheck to paycheck. Where the hell are they going to find an extra $120?
Unlike other groceries, Costco isn't that reliant on low-margin, zero-margin, or loss-leader groceries (e.g. produce). They keep their costs down by having a limited selection and large, sparsely located warehouses in relatively inexpensive areas rather than traditional retail locations. Selling larger sizes and quantities of product helps to more quickly cancel out their fixed costs. They also sell much higher margin products alongside their groceries, such as electronics and appliances.
Their margins are high like the others because many households renew memberships each year but do not make much use of them. I also think their membership does skew more affluent than many other retailers.
Wouldn’t an unused membership be worse (for Costco) than a used membership? Perhaps barring some rare edge cases like customers who would only buy loss leaders, or stores that are congested with shoppers.
Interesting point, I wouldn't have guess that. Although, it sounds like they would still rather their members buy products, based on this sentence:
> If you examine the company's sales, it brought in $56.59 billion in net sales with a merchandise cost of $50.21 billion and sales expenses of $5.92 billion.
I don't think that sales expenses would vary much depending on how many members were buying products.
The membership fee keeps away many poor and lower-income shoppers. They just aren't going to pay to shop somewhere. They go to wal-mart, aldis, dollar stores, etc.
Paying employees more is supposed to work because it results in employees who do their job better. It seems Sears just increased the pay without increasing the expectations. I avoid Sears because when I go, despite there being no customers, the place is a mess and I can't find anyone to help me.
You have to pay the market rate for the people you want. The point is that going above that rate probably won’t get anything more out of them other than maybe retention.
> I'm sure above certain threshold, which is probably low, raising wages doesn't make employees do their job any better.
This is a known study
> In other words, unless you pay your workers literally peanuts, they will do the same job more or less.
Welp, nope, this deviates from the study; The "drive" study suggests that wages need to satisfy their needs, give them cushion, be at or above their peers.
For the most part, "happiness" in the U.S.A. starts at 50% more than the average salary ($50k).
I think part of the point is that you pay more money to attract different people who will perform better, or to encourage people to stay at the job longer (and thus get better at it).
If you pay a premium for labor, you need to deliver operational excellence.
I worked for a company in high school whose philosophy was to pay 150% of the local average for retail/foodservice work. They did this because they worked you 2-3x harder, and their operational framework was able to turn that into money.
Many places are designed to be on some scale of mediocrity because it's hard to the excellent. I ran into a Walmart cashier who couldn't identify broccoli the other day. That's evidence that a warm body that doesn't walk off with the till is what they hire for.
Another option is to force an increase in minimum wage which is what most people in those positions make. Not every company can afford to keep the same amount of staff on hand at that price so some people would be let go but it makes the remainder of people much more valuable.
> Unless you're in a niche that people are willing to pay a margin for or serve upscale customers who also don't mind paying margins (Costco, Whole Foods, Nordstroms, Apple, etc)
Is it fair to lump Costco in with these other companies as an example of places where consumers don't mind paying higher margins?
From a quick google search on gross profit margins:
- Costco: 13%
- Nordstrom: 38%
- Apple: 38%
- Costco: 33%
Costco's is also likely skewed due to their house brand where they likely make a much higher margin than the name brands
I lumped Costco in there just because its known for paying above average wages. I don't see these 4 stores outside of affluent, or at least upper middle class areas. I would say even Trader Joes can be lumped into there.
But the point is that if Walmart or Sams club wanted to raise their wages to match Costco, it would hurt their business because their customers can't afford it.
Funny enough, I've heard anecdotal evidence that the complete opposite was true. This comes from work I've done with a company that engineers, tests, and certifies tools under a dozen different brand names, one of which was Craftsman back when Sears owned that name outright. Whether it was official policy or not, Sears' practice was to rotate their buyers every ~3 years specifically to address the issue of buyers getting too chummy with the suppliers in their assigned sector. Unfortunately, this led to the issue of buyers being unable to develop subject-matter expertise in any one area and a broader problem where any compwtencies that were developed were often useless in their new assignment. According to those I've talked to who were around in the 80's and 90's when Sears' was starting to get pressured by other specialized Big Box retailers, whoever rotated into the position would have 0 experience with power tools or outdoor power equipment as they had spent their previous rotation buying anything from linens for the home goods group to clothing, or even flowers and plants for the gardenjng department.
The final product that wound up in consumer's hands was typically of competitive quality (hence the continued reputation of the Craftsman brand even today among the older generations) but the speed with which Sears' could expect new products to be developed and the costs involved was greatly hampered. This eventually led to Sears' losing the competitive edge in providing superior house-brand goods for the same price as the competition. Sears' had the market share and clout to get suppliers like the one I've worked with to justify the lower margins that come with designing/making a higher quality product to sell for the sams price. Once the whole buying process became incredibly time intensive due to a lack of expertise on the buying end the margins once spent on increased quality were instead swallowed up by plain old inefficiency. The end result was Sears buying a similar quality of product to what these suppliers were offering to the competition but without a cost advantage. Consumers noted the fact that a Craftsman chainsaw was no longer superior to the "X" brand this supplier provided to a store like Home Depot, except the Home Depot one was $15 less, thus began the death spiral ending in today's news.
many of the long-time employees were making pretty decent money. Way more than people at Best Buy, Target or Walmart made. Plus actual benefits. The must have had huge legacy costs, especially at the higher levels.
There was an analyst on Bloomberg Radio last week or the week before who said the big reasons for Sears' demise were pension obligations, and store managers who didn't know how to manage stores or people.
The home improvement chains hurt them too, once they started selling tools and appliances.
We bought everything at Sears in the 80's. Electronics (including computers), appliances, toys, clothes, tools, lawn and garden...
Was Sears too 'friendly' with their suppliers? When I worked at Sears at the end of the 1990's (the store was a ghost town then), many of the long-time employees were making pretty decent money. Way more than people at Best Buy, Target or Walmart made. Plus actual benefits. The must have had huge legacy costs, especially at the higher levels.