Paul Gores/Milwaukee Journal Sentinel - If you want to illustrate just how much the brick-and-mortar retail landscape has changed, you could sum it up with this:
For the first time in more than 90 years, the Milwaukee metro area doesn’t have a full-line Sears department store.
The last Sears department store here closed a week ago at Brookfield Square.
Sears in Milwaukee dates to 1927, when it had a store at N. 21st St. and W. North Ave.
“It’s sad,” said Debi Damron, a 15-year Sears employee who rang up deeply discounted merchandise for customers at the Brookfield store on its final day in business last Sunday. “I can’t believe that they decided to pull completely out of a million-person city.”
Milwaukee isn’t alone.
Once the king of U.S. retailing, Sears has shuttered more than 300 stores in the last decade nationwide, including nine in Wisconsin, as shoppers have reduced visits to malls and are buying more online.
Sears also has been hurt by new retailers focused on a single category of what had been a department in Sears. Stores such as Home Depot and Ulta Beauty, for example, have scooped away market share from Sears' home improvement and cosmetics departments, respectively. At the same time, apparel retailers catering to every size and sense of fashion have popped up in storefronts all along the mall.
Today, Sears has fewer than 550 full-line department stores in the United States, down from 861 in 2007. Although some Sears stores that sell limited merchandise like appliances, hardware and mattresses still dot the Wisconsin map, only six full-line Sears department stores remain in the state. The closest to Milwaukee is in Janesville.
“It surprises me that a market your size doesn’t have a full-line Sears still operating, but that just means you’re ahead of the curve. It will happen elsewhere,” said retail industry consultant Jeff Green, of Jeff Green Partners in Phoenix.
The population of the Milwaukee metro area is just under 1.6 million.
Paul Gores talks about the the closing of the last Sears store in the Milwaukee area. Why it happened and what mall owners are hoping to replace it with.
The question for Milwaukee is, “Will Sears be missed?”
“I think some people will miss it. The Sears name, it’s a venerable name. I think of Sears and still think of the big thick catalog we used to get at Christmas and circle things we wanted,” said industry consultant Nick Egelanian, founder of SiteWorks Retail Real Estate Services in Annapolis, Md. “But I don’t think they’ll miss it from the standpoint of how they’re living their daily lives and how they’re consuming today. I think they’ll miss it more from a nostalgic standpoint — another kind of marker on the road that goes away.”
Consultant Dick Seesel, owner of Mequon-based Retailing in Focus, said the heyday for Sears came mostly in 1960s and ‘70s. The Sears store at Brookfield Square opened in 1967 as one of three anchors. The two other original anchors — J.C. Penney and Boston Store — still are there, although the parent company of Boston Store, Bon-Ton Stores Inc., filed for Chapter 11 bankruptcy in February.
“In the ‘70s when they started building their own shopping centers in some parts of the country, they were flying pretty high,” Seesel said of Sears. “But that was before there was Walmart. That was before there was Home Depot.”
'Everything under the sun'
Sears stood apart from other dry goods department stores in that it had almost everything a consumer might need.
“Sears was always all things to all people,” Seesel said. “They were selling appliances and lawn mowers and hardware and all sorts of things that were really meant to appeal to that customer moving to the suburbs.”
Seesel continued: “What happened long before Amazon is they started dealing with a lot of competition in various parts of their business. There was somebody like Home Depot able to chip away at Sears' market share in those kinds of businesses. You had Best Buy growing. You had a lot of category specialists in big box stores growing up that made that Sears model of everything under the sun under one roof somewhat obsolete.”
At the same time, he said, Walmart was on the march, starting in small towns and heading toward suburbia on its way to supplanting Sears as the world's largest retailer.
In 2005, discount retailer Kmart and Sears merged, creating Hoffman Estates, Ill.-based Sears Holdings Corp. But things didn’t get better for Sears, industry experts said.
“It’s a pretty common theme in retail that two weak players, when they merge, don’t necessarily end up with one strong retailer, and that’s part of the story of Sears right now,” Seesel said.
In 2002, Sears bought classic clothing retailer Lands’ End, of Dodgeville, to create a store-within-a-store concept. But Sears Holdings spun off Lands' End as a separate company in 2014.
Transformation in progress
Annual revenue for Sears Holdings in 2017 was $16.7 billion, down 25% from 2016 and only a third of what it was in 2007. The company lost $383 million last year, an improvement from a $2.2 billion loss in 2016. It hasn’t posted a profit from continuing operations since 2010.
Sears says it’s in the midst of a transformation that includes more digital selling.
“We are making significant progress in our transformation as a company,” said Sears spokesman Larry Costello.
He said Sears has made progress toward a return to profitability, and has significantly expanded its “Shop Your Way” loyalty program. Costello noted the company’s partnership with Amazon, in which Sears' Kenmore appliances and DieHard brand products will be sold on Amazon.com, and pointed to the company’s new DieHard state-of-the-art auto centers in Texas and Michigan.
Sears sold its Craftsman hardware brand in 2017 to Stanley Black & Decker.
“This year, we built on the success of the smaller-format stores we opened in 2016 by opening several innovative new store formats across the U.S. that highlight the power of our company’s integrated retail capabilities,” Costello said. “The Sears Appliance & Mattress stores in Texas, Pennsylvania and Hawaii showcase two of our strongest categories, while blurring the lines between the traditional brick-and-mortar and online shopping experiences.”
Costello said that for competitive reasons, he couldn’t disclose whether a smaller Sears selling appliances and mattresses will be part of the redevelopment of the Brookfield Square space where Sears had stood.
Plans call for most of the Brookfield Sears building to be demolished. In its place will be a 41,000-square-foot BistroPlex, operated by Marcus Corp., and a 45,000-square-foot restaurant and entertainment center that includes WhirlyBall, a game in which teams of players in bumper cars use hand-held scoops to pass a ball to one another as they try to score by hitting a basketball-like target. The Brookfield Square WhirlyBall facility also will have laser tag and bowling.
Many shopping malls in the U.S. are redeveloping with restaurants and entertainment venues as fewer people shop at brick-and-mortar stores.
“The fact that there are redevelopment plans behind these Sears stores is a great thing for not only the mall developer, but also the consumer,” said consultant Green. “They are going to put in other uses that are more relevant to the consumers than Sears was.”
He added: “I don’t see anything that’s bad about it other than it’s a little bit jarring to see the changes that are occurring in the retail industry.”