Sears Holdings Corporation Strategic Plan

Topics: Sears Holdings Corporation, Kmart, Sears Pages: 6 (2213 words) Published: July 12, 2011
Sears Holdings Corporation is a company that came from two very well known organizations, Sears and Kmart. Both companies go back even farther than the 1900s and unfortunately both companies experienced financial difficulty at one point. With the merger Sears Holdings Corporation has the experience of both organizations as well as their different style of operating. Along with an improved customer base and a new outlook Sears Holdings Corporation is experiencing financial growth. Richard W. Sears was an agent at a railway station. This job provided him with loads of free time, so he would sell lumber and coal to local residents for extra money. During his employment with the railway station he came across some discarded watches and decided to repair and sell them. He made a good profit and decided to try it again. In 1886 Sears began the R.W. Sears Watch Company in Minneapolis.

After moving his business to Chicago, IL Sears advertised for a watchmaker and came across Alvah C. Roebuck who claimed to do excellent work. In 1893 Sears Roebuck and Co. was formed. Adapting the motto, “Shop at Sears and Save” Sears quickly became the place where farmers shopped to save money and cut out the middleman. Sears’s prices were much cheaper than rural stores.

By 1895 Sears was producing a 532-page catalog with many other items, such as stoves, women’s clothing, wagons, furniture, china, firearms, glassware and baby carriages etc. “Sales in 1893 topped $400,000 and two years later they exceeded $750,000” ( Roebuck had left the company due to an illness, but Sears continued to use his name.
In recent years Sears is best known for its Craftsman tools and Kenmore appliances. “As of 2002 Sears was one of the nations largest retailers with $41 billion in revenue and 870 full line stores. Sears is also the nation's fourth largest jewelry retailer, with nearly $1 billion in total annual jewelry sales” ( Even with its success Sears numbers were still coming in low with decreasing sales and poor performing softlines (clothing).

Following behind the idea of Frank W. Woolworth, Sebastian Spering Kresge and John McCrory, the founders of Kmart, decided to open a five and dime store in Detroit in 1897. That partnership dissolved about two years later and Kresge went on to manage the stores in Detriot while McCrory managed the ones in Memphis. Kresge’s store quickly found success carrying costume jewelry, housewares, and personal grooming aids that he decided to open another store in Port Huron, Michigan and other stores quickly followed. “By 1912, when Kresge incorporated his company in Delaware with a capitalization of $7 million, there were 85 stores producing annual sales of $10.3 million. Four years later he reincorporated in Michigan, this time with a $12 million capitalization. In 1918 the firm went public with a listing on the New York Stock Exchange” ( After World War I inflation caused Kresge to increase his prices form a nickel and dime to twenty-five cents up to one dollar. Despite this he continued to succeed opening more chains of the store. In 1924 the company's 257 stores generated annual sales of $90 million.

In recent years Kmart is best known for its Martha Stewart collections, Jaclyn Smith and Joe Boxer lines. The company continued to grow and open more locations and became the second largest discount retailer (behind Walmart) with over 21,000 stores. Until 2002, Kmart was doing so poorly that it couldn’t even afford to pay its distributors and had to file bankruptcy. According to, Kmart's bankruptcy filing, with $17 billion in assets, is the biggest ever for a U.S. retailer.

The surprise merger of two of the oldest retailers, Sears and Kmart created the nations third largest retailer. Kmart bought Sears for 11 billion...
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