Sears is a retail icon. The department store giant was one of the first in the industry and has been in business for over a century. It began as a store that operated solely on sales from catalogs and morphed to be a founder of the brick and mortar style of retail sales.
Sears has faced financial struggles over the past few decades. Sales went down, debt mounted and the company ultimately filed for a Chapter 11 bankruptcy. This form of bankruptcy is designed to provide the possibility the store can survive the petition and continue operations.
What can business leaders learn from Sears?
Two lessons any business can take away from the Sears bankruptcy include:
- Evolve. In the beginning, Sears was an example of a business evolving with the times. The business was wise to shift from the catalog style of selling products to consumers to a brick and mortar store model within malls throughout suburban America. Unfortunately, that is where the evolution stopped. Sears did not continue to keep up with changes in shopping style and consumer choices and missed the opportunity to move into the online market.
- Merge wisely. As the adage goes, two wrongs do not make a right. In this case, Sears merged with Kmart, another struggling brick and mortar store. Although the leaders behind the merger and acquisition deal expected the transaction would strengthen both businesses, it did not. The failure serves as a reminder of the importance of thorough due diligence prior to completing a deal. Perhaps more information about Kmart’s struggles would have led Sears to reconsider the deal.
The possibility that Sears will come out of its current bankruptcy and find success within the marketplace remains. In reality, like its predecessors Toys R’ Us and RadioShack, the outlook is murky.