Sears, Roebuck, and Co. the Auto Center Scandal

Topics: Business ethics, Ethics, Applied ethics Pages: 8 (2635 words) Published: November 8, 2010

History and Introduction of Sear, Roebuck, and Co.

Sears, Roebuck and Co began in the 19th century and sold farm supplies and consumer items as a small mail order company. The first Sears retail store opened up in Chicago on the 2nd February 1925 in the building named the Merchandise. This store had included a soda fountain and an optical shop. The first detached and separate retail store opened up on the 5th October 1925 in a city called Evansville in Indiana. During the summer season in 1928 3 more Chicago department stores opened newly, one on the 63rd and Western a second on the south side at Kenwood and 77th, and the third at north side at Lawrence and Winchester Street. In 1929 Sears bought out the department store Becker-Ryan Company and renamed it and in 1933 demolished old Becker-Ryan Company store in Englewood, and built the first windowless department store which was an inspired from the fair which took place in 1932, named the Chicago World's Fair. The Roebuck and Sears catalogue was sometimes denoted to as "The Consumers' Bible" and the newly launched Christmas Catalogue was known as the "Wish Book", as it included all forms of toys and accessories children used to pick. In these times were outhouses existed and no toilet paper was available readily, the sheets of the massively mailed catalogue in Chicago were used as toilet paper.

Continuing on Sears responded to the ongoing changes in America’s society, such as the movement from farms to factories and the new outcome of the automobile industry expanding in to many homes, Sears opened many hundred of retail stores in the following years. The company was experiencing rapid expansion and ultimately it expanded to include many other businesses such as an insurance branch named Allstate Insurance, a Real Estate Service by the name of Coldwell Banker, Securities department called Dean Witter Reynolds, and credit cards facilities and service being Sears Discover. Each of these businesses listed above became its own partition, in accumulation to the merchandising group which included appliances, retail stores and auto service centres. By the early 20th century, the company was reporting revenues and earnings in the many billions of dollars.


In spite of its long history of large earnings and its saturation and appeal into the U.S. market, Sears' retail businesses began to experience severe financial difficulties in the 1980s by its competitors. Discount retailers such as Wal-Mart were growing rapidly ahead in market share, leaving Sears very far behind. Sears responded to this large issue by adding “Non-Sears name brands” (no Frills) and a slogan "everyday low price" policy to compete with Wall Mart. But unfortunately these efforts were no good as 1990 approached Sears calculated an enormous 40 percent decline in earnings, with the merchandising group dropping a monstrous 60 percent resulting in a crash in Sears’ company.

Cost-cutting measures were planned and took place, including the elimination of jobs and a focus on profits at every level. Over 45000 jobs were eliminated and a large clamp down on compensation and the closure of several offices. Sears’, Roebuck and Co claimed that the cuts and closings were part of a reorganization of its retail operations, and would save 50 million in one year. Also in addition “another ten regional buying offices and 26 of its 72 district merchandising units would be but removed.” The Sears real estate also was known as the leanest real estate service in the country however the last decade it had suffered from “expenses that ate up more than 30 percent of its potential profits.” Their aim of cutting down on the bottom line was to improve the ratio at which the companies profits had come in. “The new strategy had effectively eliminated a layer of managerial department” and “created a more direct line of communication between the stores and the headquarters...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Sears Auto Center Scandal
  • The Corporate Ethics of Sears Roebuck Co Essay
  • Essay about Sears Scandal of 90's
  • Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc. Essay
  • Essay about The Corporate Ethics of Sears, Roebuck & Co.
  • Sears Roebuck and Company Essay
  • Sears Roebuck Essay
  • Sears Essay

Become a StudyMode Member

Sign Up - It's Free