by Simon Black, Sovereign Man:
In 1886 there were only 38 states in the United States.
Electric power was still cutting edge technology that few people had ever seen.
The Statue of Liberty hadn’t even been dedicated yet.
But it was that year that a man named Richard Sears founded a small retail company in Minneapolis, Minnesota that would grow into a retail juggernaut.
Sears was truly the Amazon of its day.
Even in the late 1800s the company was able to deliver just about any product you wanted right to your doorstep.
This was no small feat considering the first delivery truck wouldn’t be invented until 1895. There was no transportation infrastructure. And two-thirds of the population lived in remote rural areas.
Yet despite those challenges, Sears was still able to put any product you wanted in your hands.
Over time as consumer trends changed, the company started opening physical retail stores.
And once the concept of the ‘shopping mall’ became popular, Sears department stores became a mainstay at malls across America.
To give you an idea of the size and dominance of Sears back at its peak– the company owned stock broker Dean Witter Reynolds (now part of Morgan Stanley), Coldwell Banker (real estate brokerage), Allstate Insurance (currently a $33 billion company) and it started the Discover card (a $22 billion company).
Sears seemed unstoppable… a company so large and powerful that it would rule retail forever.
Then Wal-Mart entered the scene.
And after years of focusing on efficient logistics and cost savings, Wal Mart eventually outmaneuvered Sears to become the world’s largest retailer.
By 2001, Wal-Mart’s revenues were about five times that of Sears.
Then Amazon was founded… and consumers began changing their tastes to shop online.
Sears totally missed the trend. And today the company is a tiny shell of its former self.
Over the past three years alone, Sears has lost more than $5 billion. And its stock price is down nearly 75% since 2014.
Plus the company has had to lay off more than half of its peak workforce, around 200,000 employees.
To add insult to injury, the company spent about $6 billion over the past decade buying back its shares at prices as high as $174 a share.
Shares now trade below $9. That’s a 95% loss to shareholders.
Sears recently announced it will close an additional 43 stores (on top of the 265 closures it already announced this fiscal year).
This will leave the company with 1,140 stores – just above half its 2012 size.
This is a death spiral. And it could mean the sudden loss of 140,000 American jobs.
And that’s just Sears. We could see several, large retailers shutter causing hundreds of thousands of lost jobs.
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