Sears, Roebuck and Company

The development of Sears, Roebuck and Company can best be traced by examining the careers of the principal founder, Richard Warren Sears, and executives Julius Rosenwald and Gen. Robert E. Wood Each man made a vital contribution to the company at a critical juncture, and each left a lasting impact on its operations.

Richard Warren Sears (1863-1914), born in Stewartville, Minnesota, was forced to leave high school after the collapse of of his father's business. In 1878, shortly after his father's death, he learned telegraphy, and subsequently supported his mother, sisters and himself by combining this skill with that of railroad station agent. By the early 1880s, Sears was a telegrapher and station agent in Redwood Falls, Minnesota, where he supplemented his income by exchanging lumber and coal for venison, blueberries, and other commodities.

In 1886, Sears unexpectedly began his career as a mail-order entrepreneur when he purchased a shipment of watches for half-price that a Redwood Falls jeweler had refused. He was able to buy the watches for $12.00 and sell them for just two dollars more rather than the retail price of $25.00. Sears sent samples to other agents along the railroad and within six months, Sears cleared $5,000. That same year, Sears quit railroading and moved to Minneapolis, where he founded the R. W. Sears Watch Company. During this venture, he continued to use express agents for selling as they were bonded, but he began to rely on advertising in national periodicals. One year later, Sears moved his business to Chicago and hired Alvah Curtis Roebuck (1864-1948), a native of Indiana, to assemble watches and furnish repairs.

In 1889, Sears sold his business for $100,000 and moved to Iowa to become a country banker; within a year, he returned to Minneapolis and founded the Warren Company, a watch and jewelry business. "The faithful Roebuck returned to his employ, purchased the company from Sears for a brief period in 1891, and then promptly resold it to him when requested to do so a few weeks later." In 1892, the Warren Company became A. C. Roebuck, Inc. On September 16th, 1893, the company was renamed Sears, Roebuck and Company, with Richard Sears as president. The company began to offer a much wider range of merchandise than just watches and jewelry. A branch office and shipping depot was opened in Chicago and in 1895, the company permanently moved its operation to that location. "During the next five years, Sears, concentrating on the rural market, waged a whirlwind advertising and promotional campaign which enabled his company to surpass Montgomery Ward with sales of $11 million by 1900." Although Sears advertised widely in magazines and newspapers, his principal selling tool was his catalog.

On August 17th, 1895, Alvah Roebuck, feeling the strain of long hours, sold his shares in the company for $25,000. Shortly thereafter, Richard Sears was introduced to Julius Rosenwald (1862-1932), a wholesale clothing entrepreneur from Springfield, Illinois. On August 23rd, 1895, the firm was reincorporated with Sears as president, Rosenwald as vice president and Aaron E. Nusbaum, Rosenwald's brother-in-law, as treasurer and general manager. Rosenwald quickly improved the manner of business and the quality of merchandise offered by Sears, Roebuck and Company. "Influenced by the success of Montgomery Ward and Company, Rosenwald encouraged the expansion of a range of merchandise carried by Sears." By 1896, the Sears catalog carried a wide range of general merchandise including harnesses, farm equipment, household furnishings, dishes, dry goods, firearms, and musical instruments, etc. By 1900, Sears had surpassed Montgomery Ward and Company with more than $10 million in sales.

By 1908, despite Rosenwald's endeavors, the company was in severe financial trouble due, in part to to Sears' "profit-sharing" plan where customers were given coupons which could be redeemed for expensive premiums, a scheme opposed by Rosenwald and the men he had personally trained. Subsequently, Sears resigned as president on November 21st, 1908. After a brief tenure as chairman of the board, he withdrew from active involvement in the company and eventually sold his stock for $10 million. Julius Rosenwald succeeded Sears as president and the company once again prospered. By 1910, total sales rose to $40 million. Branch offices had opened at Dallas, Seattle and Philadelphia and by 1914, the company's sales increased to $100,000,000.

During World War I, Rosenwald entered government service, leaving the company in less capable hands. When the 1920-1921 depression severely reduced farm incomes, the company found itself overstocked and unable to dispose of its goods. The company avoided collapse only because Rosenwald lent it $20 million from his own fortune. By 1922, Sears, Roebuck and Company had recovered its financial status.

Another major change occurred in 1924 when Rosenwald selected Charles M. Kittle, executive vice president of the Illinois Central Railroad as the new president of the company. In addition, at a time when company officials became increasingly concerned with the threat to the mail order business because of the shift of population from the country to the city, the decline of farm incomes, and the spread of chain stores, Rosenwald also brought in General Robert E. Wood (1879-1969). Wood, a Kansas City, Missouri native and 1900 West Point graduate, had risen to the rank of brigadier general during WW I and had also assisted Goethals in constructing the Panama Canal.

Under the direction of Kittle and Wood, the first Sears retail store opened on February 2nd, 1925 in the Chicago mail-order plant and openings in Seattle, Dallas, Kansas City, and Philadelphia followed. After the unexpected death of Kittle at the age of 46, Wood was named president; in 1939, he became chairman of the board, serving in this capacity until his retirement in 1954. By 1964, Sears, Roebuck and Company had surpassed the A & P grocery chain as the world's largest retailer. In 1973, the company's 837 retail stores, 12 catalog order plants, and 2,647 catalog and telephone sales offices reported total sales of approximately $11 billion. In 1974, the company moved its headquarters from the historic plant on South Homan Avenue to the 100-story Sears Tower in downtown Chicago. In 1987, due to the decline in catalog sales, and the relocation of the company's headquarters, the Merchandise Building closed, ending the mail order portion of the business at the Chicago plant.