Earlier this week, retail giant Sears has announced that they have officially filed for Chapter 11 bankruptcy. This signals the end of a 132-year-old business that has successfully created a successful retail operation. It also emphasizes the shift in the way consumers wish to do business which could lead to other major retailers sharing their fate. Numerous Sears and Kmart locations are scheduled to be shut don in the hopes that the company can salvage what is left of its retail empire.

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Sears has been on the verge of bankruptcy for a few years but they have managed to hang on until now. Even with the business not turning a profit in several years, such a massive organization will take some time to truly disappear. They have announced that banks have accepted their request for a bankruptcy loan and they will also be given $300 million in financing from the CEO Eddie Lampert’s hedge fund to aid their transition. A company of their size has a large amount of assets that can be quickly liquidated to cover some of their debt as they have stated. This is the first step in the process of slowing stripping the company of all non-essential components and attempting to rebuild. One of their most notable assets, Craftsman, has been sold to Stanley Black & Decker for approximately $900 million. There is hope that once this is settled, the remaining physical locations and the online portion of their business will thrive with more focused attention after so many years of a widespread business model that had been opened to so many different products and markets.

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Sears Holding’s success came from their founding concept as a jewelry sales business that offered mail order catalogues. This was revolutionary for the time as it didn’t require being physically present to make purchases which was almost unheard of beforehand. Its fair to say that Sears paved the way for its competitor Amazon to emerge as the more successful alternative in a digital age. Older generations have fond memories of browsing Sears catalogues but that has proved to be their downfall. The younger demographic has not been catered to and that has lost the company a tremendous amount of business as more efficient and user-friendly shopping platforms have appeared online. It’s the next evolutionary step in retail and Sears was not prepared to compete with the technological advances that have been displayed in the last decade. The popularity of brick-and-mortar shopping has been on a steady decline for years and without the foresight to transition into the digital age, Sears has lost billions in revenue.

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Without remaining flexible, it becomes inevitable that a business will fail in a quickly changing market such as retail. Executives have admitted that they failed to invest enough in their digital marketplace and instead focused primarily on physical assets. Filing for bankruptcy has been a concern for the company for some time, even after being acquired by Kmart in 2005. Their business was hit just as hard as Sears and the future looks bleak for both companies. As of now, Lampert has stated that he will be stepping down as CEO but will remain as chairman while the daunting task of restructuring takes place. Stores are still closing and the company will eventually get out of debt but the absolute future for Sears Holdings is not yet known.