Case Study

The Sears/Kmart Merge Case Analysis

Nick Brown

BUSN412 Business Policy

May 28, 2010

CASE ANALYSIS

Sears/Kmart Merge

COMPANY NAME: Sears/Kmart

INDUSTRY: Retail Sears Corporation

COMPANY WEBSITE: (www.Sears.com; www.kmart.com)

COMPANY BACKGROUND:

Richard W. Sears found the company Sears in 1866, were so after Alvah Roebuck became partner. Both making the first watch mail order business, making its first catalog in 1888. By 1893 the company’s name was changed to Sears, Roebuck and soon after the catalog offered a variety of merchandise from apparel, shoes, china, saddles, musical instruments, firearms, buggies, wagons, fishing table, watches and jewelry. After the Great Depression Sears, Roebuck had early success making the department store one of the top companies in retail discounters. It wasn’t until 1970 as to when other discounters like Kmart came on to the scene and started cutting into Sear’s profits and customer base. While other retailers were coming out Sears Roebuck were trying different tactics to stay #1, unfortunately Sears retail business had become weak; with the current president, Alan Lacy, trying to change things around.

Kmart was found as S.S Kresge Co in 1899, by Sebastian Spering Kresge. This company was known for its inexpensive retail store prices and items like dinnerware, apparel, shoes, jewelry and nic-knacks. This company quickly became the second largest chain in the U.S by 1912. Just like Sears Roebuck, Kmart struggled through the Great Depression but like Sears they did bounce back quick with a different tactic having carious food companies join with Kmart. This was a for sure success. It wasn’t until about 1990’s were other major retailers like Target, and Wal-Mart became competition that Kmart started to decline in profit and customers. Kmart was in such bad losses that in 2002 the company had to file for Chapter 11 bankruptcy. The former chairman of Kmart, Edward Lampert, turned the business around in less then two...