Sears holding was one of the biggest retailing companies in the United States, ranking 20th as of 2015. However, it filed for bankruptcy in 2018 and sold all its assets by the next year. Its fall shook the business world, and retailers and consumers tried to understand what went wrong and how they may avoid falling into similar traps (Harris et al., 2019). Although appearing so, the events leading to the decline of Sears did not occur within a year it filed for bankruptcy. Marketing strategies and administration policies that the company had introduced years before induced the default. For instance, it diversified too much (Thomas & Hirsch, 2018). While the public had known Sears for specializing male products in the eighties, it attempted to venture into female products too. The diversification was promising for a while; consumers admitted to having pulled away from the female products.
Further, it increased the cost of baking and insurance at a rate higher than profits attained. Sears started to lose focus through this move, and by the time the administrators realized it, it was already too late (Harris et al., 2019). Another reason for the company’s failure was its fear to spend money on the business. Susquehanna Financial Group reported in 2017 that while Sears was paying only $0.91 per square foot on upgrades in its stores and online marketing while, its counterparts Best Buy and J.C. Penney spent $15.36 and $4.13 respectively (Thomas & Hirsch, 2018). Sears also closed too many stores and fires workers to reduce cost while in truth, the move only served to increase the cost. Following the attempts to reduce costs, Sears sold most of its real estate. The number of locations it owned declined from more than 3500 to less than 1000 in only a few years.
Delegate your assignment to our experts and they will do the rest.
The fall of Sears, although partly due to unforeseeable circumstances, can directly be attributed to its ill-advised strategies. Therefore, the mistakes it made serve as a learning experience for other businesses hoping to remain active and profitable.
References
Harris, M. D., Anitsal, I., & Anitsal, M. M. (2019). The Fall of Sears from within: How Customer Sentiments Refuted Retail Capital and Authority. https://digitalcommons.georgiasouthern.edu/cgi/viewcontent.cgi?article=1040&context=amtp-proceedings_2019
Thomas, Lauren, and Hirsch Lauren. (2018). “Here are 5 things Sears got wrong that sped its
fall.” CNBC . https://www.cnbc.com/2018/10/11/here-are-5-things-sears-got-wrong-that-sped-its-fall.html
