In a 2012 column I
recalled the bad deal made by the State of Illinois in 1989 when it caved it to
threats from Sears, Roebuck to move its Merchandise Group out of Illinois. The
package authorized a new TIF-like Economic Development Area (EDA) that
diverted property tax revenues from local schools to the company, nearly 800
acres of eminently developable land worth nearly a quarter-billion dollars and
reimbursement of any monies Sears expended in developing a lucrative business
park there, including the cost of its own new corporate headquarters. That
original EDA was set to expire in 2013; Sears in 2011 asked the General
Assembly for a 15-year extension, which, after much wrangling, Mr. Quinn signed
into law.
Two weeks later,
Sears announced it had to close at least 100 under-performing Sears and K-Mart
stores nationwide.
On August 21, the Chicago Tribune reported the announcement
by Sears Holdings, the current owner, that  its loss widened
significantly in the second quarter to $573 million, possibly necessitating
closures of  additional stores on top of the 130 closures already
underway.Â
The company seems to have entered a death spiral; one of the
reasons revenue was down is that so many stores have already been closed.Â
It’s hard to say which firm has been worse managed over the past 25 years. Downsizing and financial tricks have keep each afloat, but only at the cost of long-term viability.
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This article appears in Aug 21-27, 2014.
