Sears first free standing retail store opened October 5, 1925 in Evansville, Indiana

In 1925, Sears Chairman Julius Rosenwald decided to expand Sears operations into the retail store business. At first Sears opened retail stores in the large regional Catalog Merchandise Distribution Centers at Chicago, Dallas, Seattle and Kansas City. The very first Sears retail store outside of a Catalog Merchandise Distribution Center opened in Evansville, Indiana on October 5, 1925. Moving into the retail store business was not an easy task for Sears, Roebuck and Co., the largest mail order catalog company in the United States.

Julius Rosenwald started the process when he hired Charles Kittle as the new president of Sears and Robert Wood as the new vice president of factories and retail stores. Wood previously worked for Montgomery Wards where he tried to get Wards to start opening retail stores. Wards management was skeptical of the idea and decided not to go into the retail store business. After Wood resigned from Montgomery Wards over their lack of commitment to opening retail stores, Rosenwald quickly hired him.

Many people at Sears were not convinced that opening retail stores was a good thing. The greatest fear many Sears managers had was that the stores would take business away from the company’s profitable catalog operations. Rosenwald, Kittle and Wood believed that the urban farm population would continue to order from the Sears catalog. They also believed that city dwellers were more interested in shopping at stores than buying goods through the mail order catalog.

The time was right for the company to start opening retail stores. The population in the United States was migrating from rural farms to cities. The root of this shift was an increase in labor saving mechanical technology on the farms. At the same time new factories were being built in the cities. These factories produced a wide variety of new consumer products that included radios, electric appliances, power tools, and man made wash and wear fabrics.

Under Rosenwald, Kittle and Wood, Sears redefined the retail store concept. The strategy these men developed turned the Sears retail store into a new kind of department store, a place for the whole family to shop. As Robert Wood put it:

The (existing) department stores were essentially for women. Eighty percent of their business was in women’s wear, hosiery, and all other apparel. A man in a department store was lost. We made it a store for the family; in other words, for the men, too. We added hardware, tires, service parts and other items of particular interest to men.

Finding the right product mix was not as difficult as creating an organizational structure that made the retail store system work, and finding qualified people to run the new stores. Turning catalog sales people into retail sales people was a very difficult task. As Wood put it, "We were as green as grass in passing the goods across the counter—and we made many mistakes. But the concept was sound. We gave people values. In spite of our mistakes, they kept coming and the store was a success from the day we opened."

Sears management struggled with creating a new Sears retail store system that took advantage of the existing catalog buying and distribution organization. After Kittle died suddenly in 1928, and Rosenwald retired in 1932 Wood took over as president of Sears. Wood completely redefined Sears. He created a whole new organizational structure to run the retail stores. The new field organization was based on managerial decentralization. Wood delegated responsibility and authority as far down the line as possible. He wanted well-qualified people in key posts at the scene of action. He gave the field people wide latitude to exercise initiative and judgement in light of local circumstances.

Things were rough at first. The lack of skilled retail management was a serious problem for Sears. Wood persevered, he encouraged hiring people with potential and promoting them to management positions. Soon, a highly qualified group of retail managers emerged.

During the first fifteen years of the Sears retail experience, Wood spent a great deal of time visiting the stores. He wanted to know first hand what kinds of problems the stores faced and what changes to make in company policies and practices to enable them to do a better job.

It took nearly two decades of hard work to establish an efficient field organization. The success of the retail business at Sears was reflected in the skyrocketing sales figures for the company during the coming decades.