Sears
Sears' extinction is a masterclass in how dominant species die - not from catastrophic events, but from ignoring incremental environmental shifts.
Sears' extinction is a masterclass in how dominant species die - not from catastrophic events, but from ignoring incremental environmental shifts. Once the largest US retailer accounting for ~1% of GDP at its 1980s peak, Sears revolutionized commerce twice: catalog sales (1888-1993) and mall-based department stores (1950s-1980s). Then it stopped evolving while the environment kept changing.
The fatal mistakes were distribution network neglect and misguided cost-cutting. While Walmart built 190 distribution centers (1990-2006), Sears maintained 1970s-80s infrastructure: only 12 regional DCs serving 2,200 stores with 600+ mile average shipping distance versus Walmart's 150 miles. This created 40% higher logistics costs, making price competition impossible and enabling Amazon to deliver 3x faster. Under CEO Eddie Lampert (2013-2018), aggressive cost-cutting made stores shabby, accelerating customer defection. The company accumulated $13 billion in debt before filing for bankruptcy in October 2018.
The lesson: extinction rarely announces itself with drama. Sears lost $11 billion over 8 years - slow enough to rationalize each quarter, fast enough to become irreversible. Dominant species die when they optimize for yesterday's environment while tomorrow's quietly arrives.
Key Leaders at Sears
Eddie Lampert
CEO
Cost-cutting strategy that accelerated decline rather than enabling recovery
Cautionary Notes on Sears
- Underinvestment in e-commerce while Amazon captured online retail
- Spinning off valuable assets (credit cards, Allstate) for short-term liquidity
- Cost-cutting degraded customer experience, accelerating customer defection
- Treated distribution as cost center, not strategic asset
- Kept 1980s infrastructure while competitors rebuilt networks
- Failed to apply Murray's Law principles to facility network
Sears Appears in 2 Chapters
Sears filed for bankruptcy in 2018 after decades of gradual decline, failing to adapt to e-commerce and discount retail.
How Sears' slow extinction differed from rapid collapse →Sears maintained 1970s distribution infrastructure while Walmart built 190 DCs, creating 40% higher logistics costs that made competition impossible.
How distribution network neglect killed Sears →