Dear Mr. Berko: In 1954, my parents took me to the first Sears store that opened in Oklahoma City. We were impressed with all the merchandise and fantastic displays. Sometimes we’d just drive to Sears to walk around for fun without buying anything. I remember when Dad bought 25 shares of Sears in 1955 and how excited he got when it later split 3-for-1 and he owned 75 shares. And I have two old Sears catalogs from 1948 and 1952, which still look like new. I know Sears is closing stores, sales are down and the stock price has tumbled to the low $20s. I have such good memories of Sears, but I wonder whether the stock has hit bottom and whether it would be good to buy Sears, as it has moved back to $38.
— H.R., Port Charlotte, Fla.
Dear H.R.: Sears today is not the Sears you remember from 60 years ago. If Richard Sears and Alvah Roebuck were alive today, they’d turn over in their graves seeing how the mail-order catalog company they founded in 1887 has changed. By 1894, the Sears catalog had grown to 520 pages and was known in the industry as the consumer’s bible. Those catalogs featured bicycles, sporting goods, stoves, sewing machines, furniture, automobiles and hosts of other items, and revenues were over $700,000 that year. Today your antiquated catalogs are worth more as collectibles than a share of Sears Holdings stock (SHLD-$38.26).
In 1925, Sears opened its first retail store, in Chicago. It became the largest retailer in the U.S. but was surpassed by Wal-Mart in 1989. In 1993, Sears published its last catalog. That was also the year management realized that Target, Lowe’s, Home Depot and Best Buy were eating Sears’ lunch.
In 2005, via an ignominious move to gain traction, improve revenues and reduce costs, management allowed Kmart (engineered by Edward “Fast Eddie” Lampert) to purchase Sears. The new company, called Sears Holdings, had $50 billion in revenues from 3,500 locations in the U.S. and Canada.
