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Sears launched the strategy of selling everything to everyone over a century ago.
But it has long since abandoned this role of innovator in retail. It was overtaken at first by superstores like Walmart and Home Depot, then by Amazon as a destination of choice for clothing, tools and appliances.
Over the last decade, Sears had been led by hedge fund manager Edward S. Lampert, who had sold many of the company's properties and value brands, but failed to develop a winning strategy. to appeal to consumers who were increasingly shopping online.
The result has been a long, painful decline. Ten years ago, the company employed 302,000 people. Today, about 68,000 people are still working at Sears and Kmart, of which Lampert is also a member.
The retailer is currently preparing a chapter 11 bankruptcy filing to reduce its debts and continue to operate at least during the holidays, according to two knowledgeable people who spoke under the guise of anonymity to discuss the plans. l & # 39; company.
As part of the reorganization plan, which is expected to be filed late Sunday, Sears will receive a large loan to help keep its shelves stocked and pay for its employees, said these people. The company also plans to close up to 150 additional stores in order to reduce costs and find a solution.
Founded shortly after the Civil War, the original Sears Company, Roebuck & Co., created a cataloging business that sold to Americans the latest dresses, toys, self-built houses and even stones. gravestones. At a time of glory, the company's stores, which began spreading across the country in the early 20th century, were showcases for indispensable washing machines, snow tires and furniture.
Sears stores remain the centerpiece of hundreds of shopping centers across the United States and their decline has reduced traffic to many of these centers.
The company has lost about $ 5.8 billion over the last five years and closed over a thousand stores over the past decade. Of the remaining 700 shops, many offer frequent sales, empty shelves and handwritten posters.
In lack of cash, the company has a debt payment of $ 134 million due Monday. Its total debt was approximately $ 5.6 billion at the end of September.
Over the weekend, a group of banks have negotiated with Sears the terms of a new loan, totaling more than $ 500 million, told people informed about it.
Rearranging Sears will not be easy. The company's e-commerce business represents only a tiny fraction of Amazon's sales, one of the most profitable companies in the world. And bringing customers back to Sears stores will require investments that the company will probably not be able to afford.
The e-commerce boom has recently contributed to a record number of store closures and retail bankruptcies, including Sports Authority, Payless Shoes and Toys "R" Us.
Like Sears, Toys "R" Us had been trying to reorganize itself, but the company finally closed and dismissed all its employees in June, when its lenders concluded that the company was not more viable.
Although Sears lost its competitive edge a long time ago, its imminent bankruptcy is still an important moment for its industry.
No other big retailer has endured or played a role as important in American life as Sears
The company began selling watches to railroad agents in 1886 and quickly grew to become a large mail order company that sold clothing, tools, shoes at one time. even cocaine and opium, through 1,000-page catalogs.
Sears Roebuck was, in many ways, a first version of Amazon. She used the postal service to reach the most remote areas of a growing country and stocked and shipped products from a 3 million square foot warehouse in Chicago.
After the Second World War, Sears stores met the needs of the country's growing middle class. Families came to take pictures of their children, rotate their tires and oil, and buy Kenmore refrigerators.
"It's at Sears that you went shopping," said Barbara E. Kahn, retail expert and marketing professor at the Wharton School of the University of Pennsylvania. "They sold basic products that consumers needed."
During the 1960s and 1970s, Sears shared its success with employees at all levels of its hierarchy. Cashiers, janitors and executives took part in the profit-sharing and received options on the company's rising stock.
As many as 100,000 retired employees of Sears are still receiving pensions, which should be largely saved from bankruptcy. While the company was bleeding money and selling assets in recent years, federal regulators have asked Lampert to inject money into the pension plan. Other benefits for retirees, such as life insurance, could however be at risk.
"It's sad to see the company you really loved going into the tubes," said Ron Olbrysh, 77, who has been with Sears for 24 years and now runs a retiree association.
In the 1990s, Sears was struggling to find its place. Walmart operated its super centers across the United States. Home Depot was gaining market share in appliances and power tools, but Sears had valuable brands such as Kenmore, DieHard and Lands' End, as well as stores in prime locations.
Things changed dramatically when Mr. Lampert arrived at the scene.
A hedge fund manager and a former Goldman Sachs banker with no experience in managing a large distribution chain, Lampert took control of Kmart after its bankruptcy in 2003, and then the acquisition of Sears a year later. The company's board of directors ended up being dominated by other wealthy investors, including Steven Mnuchin, the current treasury secretary who had been Lampert's roommate at Yale.
Mr Lampert explained that his strategy was to move society from its traditional heritage to the digital age.
His plan was to use the money saved through closing stores and selling assets to reinvest in the business. But society has never gained ground online.
"It keeps getting worse," Kahn said.
Sears remains a publicly traded company, but Mr. Lampert has tremendous control. Mr. Lampert is President and Chief Executive Officer and his hedge fund, ESL Investments, is the largest shareholder and a major lender.
He orchestrated a series of cash-generating deals for Sears in the short term, but removed many of the company's most valuable assets, often divested to companies in which he also has an interest.
Shares of Sears, which amounted to $ 120 as recently as 2007, closed Friday at 40.7 cents.
Sears has sold its Lands' End used clothing brand to a separate company in which Mr. Lampert's hedge fund has taken a significant stake. The market value of Lands' End now surpasses that of Sears.
In 2015, Sears sold $ 2.7 billion worth of stores to a real estate company called Seritage. Mr. Lampert is a major investor in this company as well as its chairman. Seritage converts many of the best places into luxury offices, restaurants and apartments.
Lampert is also looking to buy the Kenmore brand from Sears for $ 400 million.
Even in the event of bankruptcy, Mr. Lampert will have a great influence on the destiny of the company. Its hedge fund holds approximately 40% of the company's debt, of which approximately $ 1.1 billion is secured by Sears and Kmart properties. As a result, he could force Sears to sell the stores or transfer those stores to him to pay off the debt.
"Lampert will win," said Olbrysh, a retired Sears worker. "There is no question about it."
Tiffany Hsu and Michael J. of La Merced contributed to the report.
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