Sears

For most of the twentieth century, Sears wasn't just a retailer, it was closer to a piece of American infrastructure. Its catalog let rural families order almost anything without leaving home decades before Amazon existed. At its peak, Sears was the largest retailer in the United States, anchoring shopping malls across the country and setting the pattern other department stores tried to follow.

In 2005, hedge fund manager Eddie Lampert engineered a merger between Sears and Kmart, becoming chairman and eventually CEO, running the combined company more like a portfolio of financial assets than a retail operation people actually wanted to shop in. Individual store departments were restructured to compete against each other internally for capital, an approach borrowed from Lampert's investing background, which critics argued incentivized departments to hoard cash and undercut each other rather than build a coherent shopping experience for customers walking through the door.

Capital investment into the actual stores, updated fixtures, renovated locations, modernized technology, slowed dramatically. Meanwhile Amazon spent the same years pouring money into logistics, fulfillment infrastructure, and e-commerce technology. Sears store visits became a byword for dated, understocked, poorly maintained shopping experiences, while its most valuable real estate and brands, including Craftsman tools, were sold off or spun into separate entities, moves that generated cash in the short term but stripped away assets that might have funded a genuine turnaround.

By the mid-2010s, Sears was closing hundreds of stores a year. It filed for bankruptcy in October 2018, a company that once defined American retail reduced to a shell of shuttered storefronts and an eventual liquidation of what remained of its physical footprint.

What makes Sears more than just another retailer that lost to Amazon is the specific mechanism of the decline. This wasn't primarily a story about failing to see e-commerce coming, Sears had actually run an early, pre-internet mail order and catalog business that gave it real infrastructure and customer relationships to build from. It's a story about a company run, for over a decade, by ownership that treated the business primarily as a source of extractable financial value rather than an operating company that needed sustained reinvestment to survive. Every dollar not spent on stores, technology, or customer experience was a dollar that showed up somewhere else on a balance sheet, until there was no operating business left underneath the financial engineering to actually generate revenue from. Lampert also spun off a large share of Sears' most valuable real estate into a separate company, Seritage Growth Properties, in 2015, a transaction that generated cash and reduced Sears' balance sheet debt on paper, but permanently separated the retailer from ownership of many of the buildings it operated in, adding rent as a new ongoing cost on top of everything else squeezing its margins.