Sears

19th century: Beginnings

Richard Warren Sears was born in 1863 in Stewartville, Minnesota, to a wealthy family which moved to nearby Spring Valley. In 1879, his father died shortly after losing the family fortune in a speculative stock deal. Sears moved across the state to work as a railroad station agent in North Redwood, then Minneapolis.

While he was in North Redwood, a jeweler refused delivery on a shipment of watches. Sears purchased them and sold them at a low price to the station agents, making a profit. He started a mail-order watch business in Minneapolis in 1886, calling it the R.W. Sears Watch Company. That year, he met Alvah Curtis Roebuck, a watch repairman. In 1887, Sears and Roebuck relocated the business to Chicago, and the company published Richard Sears's first mail-order catalog, offering watches, diamonds, and jewelry.

In 1889, Sears sold his business for $100,000 ($3.2 million in 2024 dollars) and relocated to Iowa, planning to be a rural banker. He returned to Chicago in 1892 and established a new mail-order firm, again selling watches and jewelry, with Roebuck as his partner, operating as the A. C. Roebuck watch company. On September 16, 1893, they renamed the company Sears, Roebuck, and Co. and began to diversify the product lines offered in their catalogs.

By 1894, the Sears catalog had grown to 322 pages, including many new items, such as sewing machines, bicycles, sporting goods and automobiles (later produced, from 1905 to 1915, by Lincoln Motor Car Works of Chicago [no relation to the current Ford line]). By 1895, the company was producing a 532-page catalog. Sales were over $400,000 ($12 million in 2024 dollars) in 1893 and over $750,000 ($25 million in 2024 dollars) two years later. By 1896, dolls, stoves, and groceries were added to the catalog.

Despite the strong and growing sales, the national Panic of 1893 led to a full-scale economic depression, causing a cash squeeze and large quantities of unsold merchandise by 1895. Roebuck decided to quit, returning later in a publicity role. Sears offered Roebuck's half of the company to Chicago businessman Aaron Nusbaum, who in turn brought in his brother-in-law Julius Rosenwald, to whom Sears owed money. In August 1895, they bought Roebuck's half of the company for $75,000 ($2.5 million in 2024 dollars), and that month the company was reincorporated in Illinois with a capital stock of $150,000 ($4.9 million in 2024 dollars). The transaction was handled by Albert Henry Loeb of Chicago law firm Loeb & Adler (now Arnstein & Lehr); copies of the transaction are still displayed on the firm's walls.