Responding to Business Challenges The Evolution of Sears Holdings Company Sears Holdings began as a sole proprietorship in 1886 known as R.W. Sears Watch Company in Minneapolis. As the name suggests, founder Richard W. Sears sold only watches. Sears wanted to establish his company in Chicago and needed a partner to do so. He put an advertisement in the local paper, and Alvah C. Roebuck responded. Together, they formed Sears, Roebuck, and Co. as a corporation and expanded the business's to offer more product lines through mail order catalogs. Sears became a public corporation in 1901 to secure financing for growth. To manage its growth, the company developed a time scheduling system that ensured orders were accurate and shipped on time. Expansion continued with the introduction of retail stores in 1925. The company's Craftsman and Kenmore brands became popular, and soon retail sales outperformed mail order sales. Sears even sold arts and crafts for assembly on the customer's property. Foreign expansion, the building of the famous Sears Tower, and the installation of Sears.com solidified the retailer as a household name. However, success can often breed complacency that re- sults in a business' decline. Lack of investment has resulted in less-than-pristine retail locations that customers no lon- ger frequent. In 2004, Kmart acquired Sears for $11 billion and adopted the name Sears Holdings Company. The merged company continues to struggle with losses and is selling off its best-known business units and underperforming stores. Discussion Questions 1. Why did Sears become a public corporation? What benefits does this form of organization have to offer Sears? 2. Describe some reasons for why the firm is struggling. 3. What is Sears doing to bounce back from its losses?