Sears Holdings

Sears' 2018 bankruptcy ended a 132-year run that once made it America's largest retailer. The company's collapse wasn't sudden—it was a 30-year extinction vortex where each cost-cutting measure accelerated the decline it was meant to prevent. Under Eddie Lampert's ownership from 2005, Sears prioritized financial engineering over retail operations. Stores deteriorated, inventory thinned, talent fled. This is the biological equivalent of an organism cannibalizing muscle tissue to maintain fat stores—surviving quarter to quarter while losing the capacity for long-term survival. Sears' failure illuminates the resource allocation death spiral. As sales declined, the company cut investment in stores, which drove more customers to competitors, which reduced sales further. Healthy resource allocation requires investing in growth even during decline; Sears did the opposite, harvesting every asset (real estate, brands, inventory) to fund short-term survival. The company spun off Lands' End, sold Craftsman to Stanley Black & Decker, and monetized real estate—stripping every valuable organ while the core business atrophied. The mechanism Sears failed to understand was competitive exclusion in retail. Walmart captured price-sensitive customers; Target captured style-conscious customers; Amazon captured convenience-focused customers. Sears tried to serve everyone and ended up serving no one—a generalist squeezed by specialists in every niche. By the time bankruptcy arrived, Sears had 687 stores, down from 3,500. The remaining stores were museums of retail decline: empty shelves, demoralized employees, customers who came only to witness the end.