It is the result of a combination of factors, from a changing marketplace to misguided management. And while the announced closing of the Sears store at Vancouver Mall could be viewed as simply the tale of an evolving America, in truth there is more to the story.
From a local standpoint, last week’s announcement that the store will close in November — along with 32 other Sears stores and 13 Kmart outlets owned by the same company — represents the turning of time. Sears has been an anchor of Vancouver Mall since the center opened in 1977, enduring through ownership changes to both the mall and the corporation. For many Clark County residents who recall when malls were hangouts as well as places to shop, the closure evokes memories of teenage years and a long-ago Vancouver.
For the entire country, in fact, the slow demise of Sears mirrors the history of retail in the United States. Incorporated in 1892, the Sears brand became a 20th century icon largely through its mail-order catalog. For decades, Americans in far-flung rural areas could order everything from hammers to sewing machines to the Heidelberg Electric Belt, which sent electric currents through men’s groins to cure a “weak or deranged nervous system” and double “sexual force and power.”
There is some symmetry in the fact that Sears was built upon its mail-order business and now is faltering, in part, because of online shopping. Competitors have more effectively and more quickly adapted to the marketplace’s return to the kitchen table, and Sears has run a deficit of more than $11 billion during eight straight years of losses.
Since merging with Kmart in 2005, the number of U.S. locations has dropped from about 3,500 to less than 900. In other words, the announcement of additional closures was not a surprise. Last year, Mark Cohen, a former Sears executive and now a professor at Columbia Business School, told The New York Times, “It’s the longest liquidation in retail history.”
Behind that liquidation is Eddie Lampert, a hedge fund owner who controls the company as head of ESL Investments. Lampert is a devotee of author Ayn Rand and named his 288-foot yacht “Fountainhead” after one of her novels. Adhering to Rand’s philosophy of ojectivism — basically, that every person looks out for only their self-interest — he broke the company into 30 separate units in an effort to create internal competition. As Mina Kimes wrote for Bloomberg Business in 2013: “He created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance. Instead, the divisions turned against each other.”
As Lynn Stuart Parramore wrote for Salon in a 2013 profile of Sears: “Humans actually have a natural inclination to work for the mutual benefit of an organization. They like to cooperate and collaborate, and they often work more productively when they have shared goals. Take all of that away and you create a company that will destroy itself.”
All of that is probably a needlessly philosophical view of Sears, but it is one that likely will be taught in business schools for decades to come. Lampert’s adherence to a flawed philosophy is precipitating the demise of an American institution.
For Clark County residents, that might or might not have any relevance. All we know is that it is resulting in the closure of a familiar store that long has been part of the community.
