Sears, Roebuck: Myths Magnify the Troubles : Retailing: Like America, the chain is brought to earth by a new era.

Sanford M. Jacoby is professor of history and management at UCLA.

Many Americans feel a nostalgic sadness watching giant Sears, Roebuck & Co. struggle to stay afloat. Like America itself, Sears once was bigger and more profitable than its competitors. In fact, the Sears store was America, a place exuding the folksy values of a Frank Capra movie. Free of class distinctions, it catered to a clientele ranging from blue-collar workers to home-owning professionals seeking a good, honest deal.

There is little doubt that Sears is in trouble. Since 1971, it has lost more than a fifth of its retail market to major competitors. In the last two years, 48,000 employees have been laid off. And Sears announced Monday that it is laying off an additional 50,000 employees, closing unprofitable stores and discontinuing the venerable Sears catalogue.

Along with its economic problems, Sears has been plagued by other troubles. In California and New Jersey, Sears is alleged to have cheated customers at its auto-repair shops. And its Allstate subsidiary has been criticized for improperly resolving insurance claims arising from last year's fire in the hills of Oakland.

What's going on here? Is this a case of a good company gone bad? As prosperity fades--for corporations and society--do moral values also languish?

The truth is, the folksy Sears image was mythological. Even in its heyday, Sears was steeped in controversy. Populist critics blamed its mail-order catalogues for destroying country stores, charges that were heard again in the 1930s when the company went into the retail business. In the 1950s, Robert F. Kennedy, then a Senate investigator, accused Sears of relying on the Teamsters and other corrupt elements to keep legitimate labor unions out.

This is not to suggest that Sears is cursed with a fatal flaw. Historically, it was no more unscrupulous than other companies. But it was easier for Sears to transcend its blunders when it was flourishing. After World War II, Sears opened hundreds of stores, cleverly siting them between cities and suburbs, making itself accessible to anyone with a car.

Customers were committed to Sears. So were employees, who enjoyed generous profit-sharing and good opportunities for promotion. Sears was the envy of the retail industry, not unlike Nordstrom today. Everyone loves a winner, and Sears built up deep reservoirs of loyalty and good will. But that was then and this is now--the postindustrial era. Gone is the great middle class that once shopped Sears. Blue-collar families are finding homeownership farther and farther out of reach. They shop at no-frills discount stores like K mart and Wal-Mart, which have taken huge chunks of market share from Sears. Discounters underprice Sears by providing minimal services and hiring a low-wage labor force. New specialty retailers like Circuit City and Toys R Us offer greater variety. Meanwhile, white-collar families have deserted Sears for upscale stores like Nordstrom and Neiman-Marcus. Sears remains stuck in older suburbs, beset with the problems of adjacent cities.

Adapting to postindustrial realities is proving difficult for Sears. Neither employees, customers nor shareholders are as happy as they once were. There are pressures to cut corners and raise profits. Such pressures, and the ethical dilemmas they create, are not new, as the company's history reveals. But slow growth has drained the reservoirs of good will, making it harder for Sears to solve its problems. And Sears finds itself being judged--and hampered--by the mythical images it worked so hard to create.

America also is steeped in mythical imagery. During the presidential campaign, at each whistle-stop the candidates conjured up visions of idyllic small towns: wholesome and white, comfortable and classless. The images are out of Currier & Ives, Capra and the Sears catalogue. As in the past, such images obscure reality. Today we have the added burden of economic stagnation, sapping our optimism and commitment to the commonweal.

Once we were a nation outside of history, riding high, bigger and better than others. Now, like Sears, we are forced to reckon with our past. Pundits tell us that history is over. It is not. Both corporate managers and concerned citizens are finding that, as Marx put it, history weighs like a nightmare on the brains of the living.

Good luck, Sears. America is watching.

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