stores . for its parent company see sears holdings . for other uses see sears disambiguation . sears roebuck and co. type subsidiary industry retail founded 1886 ; 130 years ago 1886 chicago illinois founders richard warren sears alvah curtis roebuck headquarters hoffman estates illinois united states number of locations 793 us ; 2014 1 area served united states canada mexico products clothing footwear bedding furniture jewelry beauty products appliances housewares tools electronics revenue us 17.036 billion 2014 2 operating income us 920 million 2014 2 parent sears holdings subsidiaries see below website sears.com sears officially sears roebuck & co. is an american chain of department stores founded by richard warren sears and alvah curtis roebuck in 1886 ; it used to be based in the sears tower in chicago and is now headquartered in hoffman estates illinois . it began as a mail order catalog company and began opening retail locations in 1925 . the company was bought by the american big box chain kmart in 2005 which had just emerged from bankruptcy at the time and renamed itself sears holdings upon completion of the merger . in terms of domestic revenue sears was the largest retailer in the united states until october 1989 when it was surpassed by walmart . 3 it is the fifth largest american department store company by sales as of october 2013 behind walmart target best buy and home depot 4 and it is the twelfth largest retailer in the country overall . 1 5 it operates divisions in canada and mexico among several subsidiaries within its brand . contents 1 history 1.1 mail order catalog 1.2 retail stores and diversification 1.3 decline and sears holdings 2 subsidiaries 2.1 current 2.2 former 2.3 exclusive brands 3 employee relations 4 gallery 5 see also 6 references 7 further reading 8 external links history edit mail order catalog edit richard warren sears richard warren sears was a railroad station agent in north redwood minnesota when he received from a chicago jeweler an impressive shipment of watches which were unwanted by a local jeweler . sears purchased them then sold the watches for a considerable profit to other station agents then ordered more for resale . soon he started a business selling watches through mail order catalogs . the next year he moved to chicago illinois where he met alvah c. roebuck who joined him in the business . farmers did business in small rural towns . before the sears catalog farmers typically bought supplies often at high prices and on credit from local general stores with narrow selections of goods . prices were negotiated and depended on the storekeeper s estimate of a customer s creditworthiness . sears took advantage of this by publishing catalogs offering customers a wider selection of products at clearly stated prices . the business grew quickly . the first sears catalog was published in 1888 . in 1893 richard sears and alvah roebuck renamed their watch company sears roebuck & company and began to diversify . by 1894 the sears catalog had grown to 322 pages featuring sewing machines bicycles sporting goods automobiles produced from 1905 to 1915 by lincoln motor car works of chicago no relation to the current ford line 6 and a host of other new items . by 1895 the company was producing a 532 page catalog . sales were greater than 400 000 in 1893 and more than 750 000 two years later . 7 by 1896 dolls stoves and groceries had been added to the catalog . the exterior of the sears merchandise building tower . the company had sales of 800 000 in 1895 but the national panic of 1893 a full scale depression caused a cash squeeze and large quantities of unsold merchandise . roebuck decided to quit though he later returned 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 . the new sears roebuck and company was re incorporated in illinois with a capital stock of 150 000 in august 1895 . the transaction was handled by albert henry loeb of the chicago law firm of loeb & adler now known as arnstein & lehr llp . copies of the transaction documents are now displayed on the walls of the law firm . 8 sears and rosenwald got along well with each other but not with nusbaum . sears and rosenwald bought him out for 1.3 million in 1903 . 9 rosenwald brought to the mail order firm a rational management philosophy and diversified product lines dry goods consumer durables drugs hardware furniture and nearly anything else a farm household could desire . from 1895 to 1907 under rosenwald s leadership as vice president and treasurer annual sales of the company climbed from 750 000 to upwards of 50 million . the prosperity of the company and their vision for greater expansion led sears and rosenwald to take the company public in 1906 with 40 million in stock . after sears resigned the presidency in 1908 due to declining health rosenwald was named president and chairman of the board and had full control . 10 sears s successful 1906 initial public offering ipo marks the first major retail ipo in american financial history and represented a coming of age financially of the consumer sector . 11 in 1906 sears opened its catalog plant and the sears merchandise building tower in chicago . 12 also by that time the sears catalog had become known in the industry as the consumers bible . in 1933 sears issued the first of its famous christmas catalogs known as the sears wishbook a catalog featuring toys and gifts separate from the annual christmas catalog . the catalog also entered the language particularly of rural dwellers as a euphemism for toilet paper . 13 from 1908 to 1940 the catalog even included ready to assemble kit houses . 14 novelists and story writers often portrayed the importance of the catalog in the emotional lives of rural folk . for children and their parents the catalog was a wish book that was eagerly flipped through . it was not a question of purchasing but of dreaming ; they made up stories about the lives of the models on the pages . the catalog was a means of entertainment though much of its magic wore off with the passing of childhood . 15 the company was badly hurt during 1919 21 as a severe depression hit the nation s farms after farmers had overexpanded their holdings . to bail out the company rosenwald pledged 21 million of his personal wealth . by 1922 sears had regained financial stability . first he oversaw the design and construction of the company s first department store within sears roebuck s massive 16 hectare 40 acre headquarters complex of offices laboratories and mail order operations at homan ave. and arthington st. on chicago s west side . the store opened in 1925 . in 1924 rosenwald resigned the presidency but remained as chairman until his death in 1932 ; his goal was to devote more time to philanthropy . 16 retail stores and diversification edit sears tower the mail order market was based on rural america with a slow growing population and far less spending power than urban america . rosenwald decided to shift emphasis to urban america and brought in robert e. wood to take charge . the first sears retail stores were opened in conjunction with the company s mail order offices typically in working class neighborhoods far from the main shopping center . sears was a pioneer in creating department stores that catered to men as well as women especially with lines of hardware and building materials . it deemphasized the latest fashions in favor of practicality and durability and allowed customers to select goods without the aid of a clerk . its stores were oriented to motorists set apart from existing business districts amid residential areas occupied by their target audience ; had ample free off street parking ; and communicated a clear corporate identity . in the 1930s the company designed fully air conditioned windowless stores whose layout was driven wholly by merchandising concerns . 17 from the 1920s to the 1950s sears built many urban department stores apart from but not far from existing central business districts and they overshadowed the mail order business . starting in the 1950s the company expanded into suburban markets and malls in the 1960s and 1970s . in 1959 it had formed the homart development company for developing malls . many of the company s stores have undergone major renovations or replacement since the 1980s . sears began to diversify in the 1930s adding allstate insurance company in 1931 and placing allstate representatives in its stores in 1934 . over the decades it established major national brands such as kenmore craftsman diehard silvertone supertone and toughskins . the company became a conglomerate during the mid 20th century adding dean witter and coldwell banker real estate in 1981 starting prodigy as a joint venture with ibm in 1984 and introducing the discover credit card in 1985 . in march 2009 sears purchased the social search engine delver . sears made history in 1974 when it completed the 110 story sears tower in chicago . the tower became the world s tallest building upon its completion a title it took from the former world trade center towers in new york . sears moved to the new prairie stone business park in hoffman estates illinois between 1993 and 1995 . 18 the sears centre is a 10 001 seat multi purpose arena located in hoffman estates adjacent to the prairie stone campus . 19 even though its naming rights to the building expired in 2003 it remained the sears tower through early 2009 . in march 2009 london based insurer willis group holdings ltd. was given the building s naming rights to entice the occupancy of the building . the official renaming as the willis tower took place on thursday july 16 2009 during a public ceremony hosted by willis group holdings . 20 in the 1990s the company began divesting itself of many non retail entities which were detrimental to the company s bottom line . sears spun off its financial services arm which included brokerage business dean witter reynolds and discover card . it sold its mall building subsidiary homart to general growth properties in 1995 . 21 sears later acquired hardware chain orchard supply hardware in 1996 and started home improvement store the great indoors in 1997 . 22 decline and sears holdings edit in 1993 sears terminated its famous general merchandise catalog because of sinking sales and profits . sears holdings continues to produce specialty catalogs and reintroduced a smaller version of the holiday wish book in 2007 . in 2003 sears sold its retail credit card operation to citibank . 23 the remaining card operations were sold to jpmorgan chase in august 2005 . in 2003 sears opened a new concept store called sears grand . sears grand stores carry everything that a regular sears carries and more . sears grand stores are about 175 000 to 225 000 square feet 16 300 to 20 900 m2 . on november 17 2004 sears announced it was being acquired by kmart . as a part of the acquisition kmart holdings corporation would change its name to sears holdings . the new corporation announced that it would continue to operate stores under both the sears and kmart brands . in 2005 the company began renovating some kmart stores and converting them to the sears essentials format only to change them later to sears grands . 24 sears has spent much of