WhereIsAtlas · Retail

Sears

The catalog-and-store giant that the discount era and Amazon left behind

Defunct — Chapter 11 in 2018, then sold through the bankruptcy court to a fund controlled by its own chairman; the once-1,000+ store chain is down to a handful of stores under Transformco.

Sears began in 1886 as Richard Sears' mail-order watch business and grew into a machine that taught middle-class America how to buy. The Sears, Roebuck catalog - the "Wish Book" - delivered sewing machines, farm tools, bicycles and whole prefab homes to the rural heartland, long before stores were on every corner. In 1925 it opened its first physical store, and by the 1960s and 70s the suburban Sears anchored American malls, adding the 1973 Sears Tower and subsidiaries like Allstate, Dean Witter and Discover to its empire.

The empire peaked in the 1970s but the discount era was already eating it. Walmart's low-cost big-box model overtook Sears by the early 1990s, while the catalog it was built on fell to never-ending price competition and later to Amazon. Managing its decline through the 2000s, Sears merged with Kmart in a deal announced in November 2004 that valued Sears at about $11 billion, a 10.6% premium, creating Sears Holdings under hedge-fund manager Eddie Lampert. Lampert's answer to shrinking stores was financial rather than retail: roughly $6 billion went to buying back the company's own shares between 2005 and 2010, including 21.7 million shares for $2.9 billion in 2007 alone, while capital spending stayed below 1% of revenue. The company then kept itself afloat by selling the assets it was built on: the real estate, and in 2017 the Craftsman tool brand, which went to Stanley Black & Decker for about $900m.

Sears filed for Chapter 11 on 15 October 2018 — in the early hours of the day a $134 million debt payment came due — listing $6.9 billion of assets against $11.3 billion of liabilities. What followed was a rescue rather than a recovery: after a court-supervised auction, Lampert's own hedge fund ESL Investments, which was simultaneously the company's largest shareholder, its largest secured lender and its chairman's vehicle, won the surviving 425-store business with a bid valued at $5.2 billion that an appellate court later described as largely non-cash. The rump was renamed Transformco. The bankruptcy estate then sued Lampert and ESL for $2 billion over allegedly value-stripping transactions; the case settled in 2022 for $175 million. The chain has kept shrinking ever since, down to a small handful of surviving stores. The question the sale raised — whether a chairman buying his own company out of bankruptcy counts as a rescue or as the last act of a long liquidation — was litigated, settled, and never really answered. The Sears brand endures, but the giant that once defined American retail is effectively gone.

Timeline

  1. 1886 — A mail-order start: Richard Sears sells watches by mail, then adds Roebuck as partner in 1893, building the famous catalog. (Chicago, IL)
  2. 1925 — First retail store: Sears opens a brick-and-mortar store, pivoting from catalog to the expanding suburbs.
  3. 1973 — Sears Tower: The 108-story Sears Tower - briefly the world's tallest building - becomes the emblem of the empire.
  4. 1989 — Walmart overtakes: Walmart's discount big-box model passes Sears as the US retail leader; the decline is underway.
  5. 2005 — Kmart merger: Sears merges with Kmart into Sears Holdings, run by hedge-fund manager Eddie Lampert.
  6. 2018 — Chapter 11: Crushed by debt and a retail model that no longer fits, Sears files for bankruptcy.
  7. 2019 → today — A shrinking shell: After a court-supervised auction, Lampert's own fund ESL Investments wins the surviving 425-store business with a $5.2bn bid described on appeal as largely non-cash; the rump trades as Transformco and keeps closing stores until only a handful remain.
  8. 2022 — The estate sues, and settles: The bankruptcy estate's $2bn suit accusing Lampert and ESL of value-stripping transactions settles for $175m.

Quick facts

Founded
1886, by Richard W. Sears
Catalog & store
First store 1925; catalog since 1888
Peak status
The largest retailer in the United States until Walmart passed it in 1989
The collapse
Revenue $53.0bn (FY2006) to $16.7bn (FY2017); 3,843 stores to about 687 at the 2018 filing
Kmart merger
Announced Nov 2004 at about $11bn; closed March 2005
Icon
Sears Tower (1973), now Willis Tower
Merged with Kmart
2005 (Sears Holdings)
Chapter 11
Oct 15, 2018

Sources

  1. Sears - Wikipedia — Wikipedia (2026-02-01)
  2. Sears timeline: Rise, fall and restructuring of a Chicago icon — Chicago Tribune (2026-02-01)
  3. The Rise and Fall of Sears: A Timeline — Yahoo Finance (2026-02-01)
  4. US retail giant Sears files for bankruptcy — BBC News (2026-10-17)
  5. US retail giant Sears may get reprieve from liquidation — BBC News (2026-10-17)
  6. Stanley to Buy Craftsman Brand From Sears for About $900 Million — Bloomberg (2026-10-17)
  7. Sears Holdings Corp. FY2017 Form 10-K — revenue, store counts, operating cash flow, capital expenditure — U.S. Securities and Exchange Commission (2026-10-17)
  8. ESL Investments, Inc. v. Sears Holdings Corp. (In re Sears Holdings Corp.), 51 F.4th 53 (2d Cir. 2022) — collateral valuation and the largely non-cash bid — U.S. Court of Appeals for the Second Circuit (govinfo) (2026-10-17)
  9. Fitch downgrades Sears long-term IDRs to D — petition-date funded debt of about $5.7bn — Fitch Ratings (2026-10-17)
  10. How Sears arrived at death's door — segment sales and the 1990 Walmart comparison — Retail Dive (2026-10-17)
  11. Sears' billions went to buybacks, not stores — CNN Business (2026-10-17)

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