WASHINGTON — Sears, once the largest store in America, filed for bankruptcy on Monday and said it will close 146 stores by the end of the year.
Sears Holdings Corp. — the parent company for the department stores as well as Kmart, which merged with Sears in 2005 — said in a statement that it had filed for bankruptcy protection in Manhattan. It is not yet clear if the company will seek Chapter 7 or Chapter 9 protection.
The bankruptcy filing is a shocking but not altogether unforeseen move for Sears, which has been struggling and closing stores for years.
The pioneer retailer was founded in 1886, when railroad agent Richard W. Sears began buying and selling watches in Indiana. He formed the R.W. Sears Watch Company in Minneapolis that year and by 1886 had created a catalog from which customers could order watches and jewelry. After moving to Chicago, he hired watchmaker Alvah Roebuck. They formed a store in 1893 known as Sears Roebuck and Co. By 1896, the store had expanded its merchandise as well as its catalog. Customers could order their purchagses and have them delivered right to their door.
And more than a century later, the novel concept is employed by department stores and specialty stores across the globe. Retail giant Amazon makes billions each year using the same strategy of offering consumers a vast selection of products and the convenience of door-to-door delivery.
By the late 1970s, Sears department stores were anchoring most malls across the country. The stores sold a huge array of merchandise, including the usual department store offerings of clothes, cosmetics and jewelry as well as Kenmore appliances, Kraftsman tools, tires and Diehard car batteries.
But the store suffered hiccups in leadership. In addition, poor customer service, the declining popularity of malls and the surge in popularity of big-box stories that were quicker and easier for customers to get in and out of and often undercut Sears on prices, severely hurt the chain’s bottom line.
In 1991, Walmart overtook Sears as the biggest retail chain. Two years later, Sears discontinued its catalog. Since then, Sears has limped along, periodically announcing more store closings and leadership changes. But the company seemed to be too far gone to fully recover and reclaim its share of the marketplace.
About 700 Sears and Kmart stores remain open in the United States, compared to about 2,000 stores just five years ago. Sears Holdings previously announced that 46 Sears and Kmart stores would close by November. On Monday the company added another 142 unprofitable stores to the list of locations that will shut down by the end of the year.
The company has about 70,000 employees now, compared to almost 350,000 a decade ago.
Sears Holdings shares hit its record high of $195.18 on NASDAQ in April 2007. On Monday the stock closed at its all-time low of 31 cents per share.