Tag Archives: Sears

Sears in decline leads to another large available suburban office campus

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Sears recently closed its last department store in Illinois and just announced that their large suburban campus will soon be up for sale:

Photo by Hugo Magalhaes on Pexels.com

The Hoffman Estates campus features a 2.3 million-square-foot corporate office and 273 acres, including 100 acres of undeveloped land. It was home to more than 4,000 Sears employees as recently as 2017, according to company filings…

When Sears Tower opened in 1973, it was the world’s tallest building, a fitting corporate home for the nation’s largest retailer. Sears left its namesake home in 1992, moving its corporate headquarters to Hoffman Estates and selling the tower two years later. In 2009, the name of the building was changed to Willis Tower as part of the deal for the London-based insurance firm to lease office space there.

Sears is not the only corporate mainstay to pull up stakes recently and put its suburban campus on the market.

Last month, insurance giant Allstate reached an agreement to sell its longtime headquarters in unincorporated Northbrook for $232 million to an industrial developer that plans to turn the 232-acre corporate campus into a massive logistics facility.

And what will happen to these properties? There are multiple options including:

  1. Staying as office or corporate space. Could there be another company or organization who would want this property? A suburb can spend a long time looking for a comparable replacement.
  2. Redevelop the land as a mixed-use development. See “The Metroburb” not too far way created from a former Bell Labs facility. This is a trendy approach that mixes commercial or office uses with residences.
  3. Convert the property to housing. There is demand for new housing in attractive suburbs and large tracts of land do not come open often.

Making this choice will require negotiation and conversation between the parent company of Sears, potential buyers, municipal leaders, residents, and others (which could include regional officials and actors in the real estate world). The whole process could take years and the outcome might retain some hint of the Sears headquarters or it might not.

Sears in Illinois began as catalog, became a department store, and ends in a suburban shopping mall

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Sears has come to the end of the retail road in Illinois at Woodfield Mall:

Photo by Ellie Burgin on Pexels.com

The last Sears department store in Illinois, which closes Sunday in the Woodfield Mall nearly a century after the retailer opened its first store ever in the Merchandise building, looks very, very…beige right now, in its final hours. Like beige on beige. Like the color of back-to-school Toughskins in 1974, the color of your uncle’s Corolla in 1982 and the color of linoleum at the DMV in any decade.

It opened the same day that Woodfield — named for Sears executive Robert Wood and department store magnate Marshall Field — opened in 1971. It was the largest Sears then, boasting 416,000 square feet of sales floor. From the looks of it in late 2021, it’s hard to imagine anything changed in 50 years…

At its peak, Sears, once the largest retailer in the country, had 3,000 locations, so naturally this Woodfield store is far from alone. Also dead after Sunday are Sears department stores in Pasadena, California; Maui, Hawaii; and Harrisburg, Pennsylvania. Long Island recently lost its last Sears department store; Brooklyn loses its last Sears on Thanksgiving Eve.

Indeed, seeing a Sears department store still serve as the anchor for a large mall right now is like a window into just how stormy and unmoored from the 21st century the American shopping mall has become. Sears sits at the south end of Woodfield, while JC Penny is at the northern end; Macy’s and Nordstroms occupy port and starboard sides.

There is a lot that could be lamented here (and is suggested in the piece): the experiences of many shoppers and employees, the connection of Sears and Chicago, bustling shopping areas now languishing, memories of earlier eras.

I find it interesting that the last Sears department store in Illinois closes in a shopping mall. And this is not just any mall: this is Woodfield, one of the largest in the United States, center of the fast-growing edge city Schaumburg. Department stores hit their stride in central business districts in the United States where rapid urbanization helped fuel consumer activity. But, the geography of business shifted as the population shifted to the suburbs. Department stores continued but now as anchors for a full range inside shopping experience primarily accessible by car. While suburbs are still growing, shopping malls are struggling and the fate of their department stores have both contributed to this decline and been affected by it.

The Internet may have hastened the decline of department stores but I wonder how much the move to the suburbs already weakened them. Stores need shoppers and it makes sense to move department stores closer to those shoppers (and other consumption opportunities). At the same time, the department store in a mall is different than the multiple floor downtown department store. Thinking along the same lines, how different are local stores, Sears, Walmart, and Amazon over time – which is the bigger jump and which factors mattered the most for the shift?

Thinking ahead, could the experience be recreated by putting a new Amazon store in the same spot? The location and infrastructure of the current setting is hard to beat. Shopping in person is still an important experience for many people even with Internet sales.

Two-thirds of Chicago area jobs in the suburbs

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The demise of Sears and its suburban headquarters, once famously downtown in a building that was the tallest in the world, does not mean that suburban jobs are disappearing:

Sears’ move to northwest suburban Hoffman Estates symbolized a trend: The economic ascendance of Chicago’s suburbs, which even in the early 1990s accounted for more than 60 percent of the region’s jobs.

At first glance, that dominance appears to be slipping as companies like McDonald’s make headline-grabbing moves back to the city from leafy suburban campuses.

But it would be wrong to point to Sears’ latest struggles, which eased Wednesday when the company’s chairman won a bankruptcy auction that prevented a liquidation of Sears, and conclude that the suburbs are down and out.

People working in the suburbs still provide two out of every three Chicago-area jobs, according to data provided by regional planners.

While the emphasis of this article is on the suburban Sears campus, the suburban jobs numbers stuck out to me. There are (at least) two ways to interpret the number that two-thirds of the jobs in the Chicago region are in the suburbs:

  1. Of course the majority of jobs in the Chicago region are in the suburbs: more than two-thirds of the region’s population lives in the suburbs. All those residents both help generate nearby jobs with their various consumer needs (from retail to food to building and construction) and help fill those jobs.
  2. This is a surprising figure. Chicago is a leading global city; how could so many jobs be in the suburbs when what really matters in the region is the strength of the Loop and nearby neighborhoods? Plus, it would be better if employers started in the city or moved back to the city to help create a strong base for the region as well as take advantage of the city’s economies of scale (including mass transit access) and cultural opportunities.

These figures are part of a larger trend that I think is underappreciated in the rise of American suburbs: the suburbs are jobs centers, not just a collection of bedroom communities. While the stereotypical American suburb is a community of subdivisions with occasional businesses, the suburbs are full of companies and firms doing all sorts of things. And it has been this way for decades.

Building a Sears mail-order home

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The Chicago Tribune offers a summary of Sears mail-order homes from the first half of the twentieth century:

From the early 1900s until 1942, Sears, Roebuck and Co., more commonly known as Sears, sold thousands of mail-order kit homes, which buyers could pick from a catalog. The Barrington, for example, cost $2,606 and came with everything from trim, windows, millwork and flooring — some 30,000 pre-cut and numbered parts shipped by rail for assembly by owner or a local contractor. Housing styles were in the hundreds, floor plans customizable and prices from around $100…

Ohio has the largest number of Sears kit homes, followed closely by Illinois, according to Solonickne, who started researching the topic seven years ago thanks to her daughter’s school project. Because many of the original sales records weren’t easily accessible, Solonickne decided to take on the task herself…

As of late summer, Solonickne counts 213 Sears homes in Elgin, 149 in Carlinville, 146 in Rockford and 69 in Downers Grove…

A number of companies — such as Aladdin Co. of Bay City, Mich., and Chicago-based firms Montgomery Ward and Harris Brothers — produced and sold mail-order homes. Each of these companies, including Sears, offered large luxury models (around 10 rooms) as well as two- and three-room vacation cottages, said Hunter.

Perhaps the most interesting part of this to me is the number of people who might live in such homes without knowing it. When you purchase a home, you actually do not find out much about the past of the home unless the seller goes out of their way to provide that information (and if they do, they are likely to doing so to justify a higher selling price).

It is also a bit strange to me that Sears itself would not have kept records (or those records did not survive) of to whom they sold home kits. Given the size of the order, wouldn’t Sears keep track of this information?

If Amazon is a direct descendant of Sears, we can expect Amazon to at some point sell homes or kits. Perhaps they would sell you all the materials and then offer an Amazon Expert to build it for you.

The suburban expansion strategy of Sears in the 1920s

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In an intriguing article comparing the rise of Sears and Amazon, Derek Thompson explains how Sears expanded from a mail-order business to physical stores:

In the early 1920s, Sears found itself in an economy that was coming off a harsh post-World War recession, according to Daniel M. G. Graff and Peter Temin’s essay “Sears, Roebuck in the Twentieth Century.” The company was also dealing with a more lasting challenge: the rise of chain stores. To guide their corporate makeover, the company tapped a retired World War I general named Robert Wood, who turned to the U.S. Census and Statistical Abstract of the United States as a fount of marketing wisdom. In federally tabulated figures, he saw the country moving from farm to city, and then from city to suburb. His plan: Follow them with stores.

The first Sears stores opened in the company’s existing mail-order warehouses, for convenience’s sake. But soon they were popping up in new locations. Not satisfied with merely competing with urban department stores like Macy’s, Wood distinguished new Sears locations by plopping them into suburbs where land was cheap and parking space was plentiful….

The company’s brick-and-mortar transformation was astonishing. At the start of 1925, there were no Sears stores in the United States. By 1929, there were 300. While Montgomery Ward built 90 percent of its stores in rural areas or small cities, and Woolworth focused on rich urban areas, Sears bet on everything—rural and urban, rich and poor, farmers and manufacturers. Geographically, it disproportionately built where the Statistical Abstract showed growth: in southern, southwestern, and western cities.

So what is the equivalent today of the burgeoning suburbs of the 1920s in terms of locations? The end of the article hints at one option:

Amazon, too, will thrive as long as it uses American demographics as a roadmap and takes advantage of new personal technology, like mobile phones for shopping and AI assistants for the home. In the last six months, Amazon has spent $13 billion to buy Whole Foods and its upscale urban locations. At the same time, it has offered discounts for low-income shoppers to become Prime subscribers.

Locating in wealthy communities is an interesting strategy. Other major popular retailers today are following such a model: think of Apple stores (perhaps another reason they cannot truly be town squares if they are primarily in wealthy areas) and Starbucks locations (less exclusive than Apple but still located within reach of wealthier customers or along well-trafficked roadways – see all 11 locations in the wealthy suburb of Naperville). Could we end up with a bifurcated retailing model where the wealthy (and those who can travel to these locations) can shop at a bricks and mortar store while the majority of Americans primarily shop online? This might be an overlooked edge for Walmart at this point: Amazon may rule online but Walmart stores, like Sears, are where many more typical Americans are and it may take some time to switch loyalty.

Trying to save a Sears home in Oakbrook Terrace

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Historic preservation is a common topic in older suburbs and one effort in Oakbrook Terrace features a more unusual Sears home:

The city purchased the house of the late longtime city clerk Lorraine Fik in 2008 with plans to demolish it to create a retention pond when it builds a new police station east of city hall. That work is expected to start this summer.

Saving the house, located across from city hall at 17W245 16th St., would require the city to provide water retention by other means, such as under the police station — a more costly option.

The move to preserve the house began after the recently formed historical society contacted architectural historian Rebecca Hunter of Elgin, who found proof of the home’s authenticity in the markings on the basement floor joists. The prefabricated home was built by Lorraine Fik’s husband, Edward, around 1950, and Lorraine had her clerk’s office in the basement until the city got a building of its own.

Kelly Fik, Lorraine’s youngest son, provided the historical society with photos of the house being delivered by truck and read a letter from the Fik family at Tuesday’s city council meeting.

These mail order Sears homes were produced in the early 1900s. Here are some more examples of Sears homes from the Chicago suburbs. On one hand, such homes are unusual and prior to the post-World War II era, mass produced homes were more rare. The era of the large-scale builder had not yet arrived. On the other hand, the homes don’t appear to be too unusual. Why save these homes just because they happened to come through a catalog over other homes built in the same era?

Another note: it is interesting to look at some of these examples and see how people have altered the Sears homes over the years.

Sears hopes Moneyball addition to its board can help revive the company

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Here is an odd mixing of the data, sports, and business worlds: Sears recently named Paul Podesta to its board.

Paul DePodesta, one of the heroes of Michael Lewis’ “Moneyball: The Art of Winning an Unfair Game,” a great 2003 baseball book (and later a movie) about the 2002 A’s that’s more about business and epistemology than baseball, has been named to the board of Hoffman Estates-based Sears Holdings Corp.

To be sure, he’s an unconventional choice for the parent of Sears and Kmart. But Chairman Edward Lampert is thinking outside the box score, welcoming the New York Mets’ vice president of player development and amateur scouting into his clubhouse…

“What Paul DePodesta … did to bring analytics into the world of baseball is absolutely parallel to what needs to happen — and is happening — in retail,” said Greg Girard, program director of merchandising strategies and retail analytics for Framingham, Mass.-based IDC Retail Insights.

“It’s a big cultural change, but that’s something a board member can effect,” Girard said. “And he’s got street cred to take it down to the line of business guys who need to change, who need to bring analytics and analysis into retail decisions.”…

“Analytics has been something folks in retail have talked about for quite some time, but they’re redoubling their efforts now,” Girard said. “Drowning in data and not knowing what data’s relevant, which data to retain and for how long, is the No. 1 challenge retailers are having as they move into what we call Big Data.”

Fascinating. People like Podesta are credited with starting a revolution in sports by developing new statistics and then using that information to outwit the market. For example, Podesta and a host of others before him (possibly with Bill James at the beginning), found that certain traits like on-base percentage were undervalued and teams, like the small-market Oakland Athletics, could build decent teams without overpaying for the biggest free agents. Of course, once other teams caught on to this idea, on-base percentage was no longer undervalued. The Boston Red Sox, one of the biggest spending baseball teams, picked up this idea and paid handsomely for such skills and went on to win two World Series championships. So teams now have to look at other undervalued areas. One recent area that Major League Baseball shut down was spending more on overseas talent and draft picks to build up a farm system quickly. These ideas are now spreading to other sports as some NBA teams are making use of such data and new precise data will soon be collected with soccer players while they are on the pitch.

The same thought process could apply to business. If so, the process might look like this: find new ways to measure retail activity or hone in on less understood data that is out there. Then maximize a response to these lesser-known concepts and move around competitors. When they start to catch on, keep innovating and stay ahead a step or two. Sears could use a lot of this moving forward as they have struggled in recent years. Even if Podesta is able to identify trends others have not, he would still have to convince a board and company to change course.

It will be interesting to see how Podesta comes out of this. If Sears continues to lose ground, how much of that will rub off on him? If there is a turnaround, how much credit would he get?

Mixing genres with Sears’ “Connecting Flight” commercial

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The Sears TV commercial running right now titled “Connecting Flights” turns a holiday romantic comedy trailer into an appliance advertisement. Watch here.

My Culture, Media, and Society class recently discussed genres and how they help structure narratives. If you have seen a holiday romantic comedy movie trailer or commercial, you have seen the opening part of this particular advertisement. Two people are trapped at an airport after their flights have been canceled. They meet and start enjoying each other’s company in the airport. Yet, when they finally find flights out, they realize they want to stay together and start running toward each other.

This is where the genre falls apart. Instead of running the arms of the other, each crashes into a stainless steel refrigerator. And it turns into a clear advertisement for Sears. On one hand, it is a smart use of an existing type of cultural work. On the other hand, the ending is so different than the beginning that I wonder how many people like Sears at the end. It is a bait and switch: what happened to the cheesy, feel-good romantic comedy?

In the end, Sears uses an existing narrative form to try to provide a new perspective on appliances, one of the few things Sears now has going for it. But, the contrast in genres, switching so abruptly from holiday romantic comedy to selling home appliances, is jarring.

When a suburb doesn’t support the big tax break supported office park

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An interesting story is brewing in Hoffman Estates where the State of Illinois wants to keep the Sears headquarters by continuing a major tax break but the local school district and some in the community don’t want to live with the reduced tax revenue for years to come. Central to the story: the tax break didn’t help fill up the 780 acre office park, leading to less tax revenue than expected even with Sears located there.

Instead, two decades after the special taxing area was created, some 200 acres remain undeveloped in the 780-acre park anchored by Sears Holdings Corp.’s headquarters. A swath of land that was supposed to generate $50 million in property taxes in 2012 raised only $25 million in the past tax year…

The ambitious project’s inception came at the pinnacle of “euphoria” over a booming commercial real estate market, said John McDonald, who teaches land economics and real estate at Roosevelt University. But that party ended with the economic slowdown of the early 1990s, and the market, he said, has not rebounded. There is no “desperate need for office space anywhere right now,” he said…

The inability of the park to pull in the predicted revenues underlies the battle over Sears’ future. The fight has largely centered on Community Unit School District 300, a financially strapped taxing body whose officials claimed it stood to lose more than $10 million in revenue per year under the original plan to extend the taxing area’s term.

The parties and legislators are continuing to discuss whether Sears would be required to keep some 4,000 of the roughly 6,100 jobs at its headquarters well into the future. The potential consequences should the company not meet that condition remain unclear, said Hoffman Estates Corporation Counsel Arthur Janura.

Typically, suburbs are thought to be in favor of these tax breaks as it helps lure new businesses to town. However, this situation is a cautionary tale about tax breaks: just because one is granted doesn’t necessarily mean that businesses will necessarily move in. If everyone is building big industrial or office parks and offering tax breaks, can everyone win? And in an era of falling tax revenue and rising costs, suburbs need to maximize their assets.

Of course, the State of Illinois will look really bad if Sears leaves as it will feed a (growing?) narrative that Illinois is generally bad for business. It will be fascinating to see how the State and Hoffman Estates come to some sort of agreement that everyone can live with.

Sears appliance circular does strange things to the Chicago skyline

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It is not too unusual for cities to be misrepresented in movies or television shows but this takes place in other areas as well. A Sears advertising circular from Friday, September 9, takes some interesting liberties with the Chicago skyline. Take a look:

Perhaps this looks fairly standard: the Sears logo in the top left, a “big price drop” balloon coming down from the sky in the upper right corner, six appliances on sale, and then a picture of the Chicago skyline at the bottom. While this may be just pandering to this metropolitan region, it also hints at Sears’ history: the first Sears store opened in Chicago in 1925 and their headquarters are still in the region.

But if you look more closely at the skyline picture, two strange things pop up. The first: a green lawn. Here is a close-up of the bottom left of the circular:

This green view is pretty much impossible. To get a wide view of the skyline from this angle, one needs to be at the Adler Planetarium promontory. From there, one needs to stand either on a hill sloping down, meaning the lawn is difficult to get into the shot, or from the concrete steps or walkway that go around this point. Plus, the grass is pretty high here relative to the height of the buildings. So why include the grass? It would make some sense if the circular was advertising lawn mowers – but it is not. Perhaps the “big price drop” balloon needs a safe place to land. Or the circular needs a touch of pleasing green. Or a focus group suggested the green lawn invokes images of home life, the need for beautiful appliances, and the American Dream.

In addition to the strange grass, there is something odd going on at the right (east) side of the skyline. Here is a closer view:

Even looking closely at the circular, I have a hard time figuring out what is going on here. It appears to be a hill sloping up from the lake with some buildings on the hill. Why was this added to the picture? I really have no good idea – to fill up space?

Here is what the view of the Chicago skyline looks like from my own camera near Adler Planetarium, sans verdant lawn or black hill:

If this was the starting point for the Sears image, one could crop and play with it in such a way that the added blue from Lake Michigan could be removed but adding the lawn and hill is not necessary. It would still be a very nice and useful shot.