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Sears & Roebuck has been a dominant retailer in the Midwest since it was founded in Chicago almost a 120 years ago. It’s hung on while other brands – like Marshall Field’s, Montgomery Ward – and mostly recently Borders – have disappeared or stumbled. Although its stores have winnowed, there’s still a Sears in every corner of the Great Lakes. Changing Gears is a public media project looking at our regional economy. In this story, reporter Niala Boodhoo looks at what’s next for Sears.
The watchword of American retail has always been the idea that the customer’s always right – right? That phrase is often credited to Marshall Fields, whose stores are gone from Chicago but not forgotten. So I went to the Chicago Loop to ask shoppers how they feel about another old retail brand that’s still around – Sears.
One of the first people I encountered was Mario Brownlow, a college student from Hyde Park.
When I asked him the last time he shopped at Sears, he paused:
“I haven’t shopped in Sears, in hmm, probably like three years.”
I stopped Brownlow just outside the Sears store on the corner of State & Madison. This used to be the home of the biggest department stores. Now, people come here to shop for bargains. A Target is set to move into the famous Carson Pirie Scott building across the street. And Wal-Mart plans to build a small neighborhood store nearby.
Brownlow’s arms are full of bags from Old Navy and Macy’s. Today, he’s shopping for shirts and pants. He’s thinking his next stop is the Express. I asked him, why not shop at Sears?
“I don’t know, I just haven’t,” he said, adding his last purchase at Sears was a microwave. Sears, he thinks, just doesn’t “jump” out at him like other retailers.
That’s pretty much the problem with Sears these days. The Great Recession’s been tough on virtually every retailer – especially across our region. Lately, things have started looking up for almost everybody – but Sears. In most recent financial results, sales at Sears stores were 4.5 percent worse than last year. Macy’s, Target, JCPenny – and even Kmart, which Sears also owns, all reported positive growth.
Analysts say that’s partially because younger shoppers like Brownlow are more apt to hit spots they think are trendier – like Express or H&M, in this case right next door to the Sears. So the chain competes with other retailers who just do apparel. But Sears also still sells lots of other stuff.
That’s why Gary Wands came in on his day off – to look at high-end televisions.
He said he didn’t find much.
“You know, they had some closeouts for TVs that looked appealing,” said Wands, but ultimately, he felt the selection was too small, adding: “You know for stuff like that, I’ll go to Best Buy.”
Analyst Paul Swinand says that Sears is just in a “tough position”.
“They have all sorts of people nipping at their heels,” said Swinand, who studies the retail industry for Morningstar. His office is just around the corner from the State Street Sears. He says the department store’s diverse offerings may draw customers looking for convenience, but it’s a challenge to keep them:
“Your products have to be at least as good and nearly as well priced,” he said. “So if you’re in the TV business and Best Buy is cheaper, and has a better assortment, you’re always going to struggle in the TV business.”
The same goes for fashion, he said: “If you’re trying to do fast fashion and you’ve got JCPenny and H&M at faster fashion and better prices, you’re going to struggle in the fashion business.”
Sears’s bedrock business – what made them famous from the beginning – was its catalog that offered everything.
Remember those More for Your Life commercials?
Sears has used its versatility as its selling point for years – although its latest marketing has been its Shop Your Way program that focuses on the company’s online presence.
Like many companies, Sears has looked to the Web for revival.
Its new CEO, Lou D’Ambrosio is from that world, instead of retailing. Sears wouldn’t make D’Ambrosio available for this story. In an email they sent to me after the broadcast deadline of the story had passed, spokeswoman Kimberly Freely said Sears was a company that has “long been established as the cornerstone of Americana”, adding, “Over the years, we’ve evolved with our customers to continually keep up with the ever-changing aspects of their lives”.
John Melaniphy is a Chicago-based industry consultant. He thinks Sears has to do a lot of work to remain a part of the retail landscape here.
“I think the economy, and retailing changed, and Sears didn’t follow,” he said. “Sears did not change.”
There is one bright spot. Melaniphy’s done shown that the company’s brand is valuable to immigrants – whose numbers are growing in our region and in our country.
That includes Shilpa Shah and her coworker Meena Patel, who visit the State Street Sears almost every other day on their lunch hour. They’re not just loyal to this store but also to other Sears in the suburbs.
“They have good deals, and also the customer service is good,” said Shah, who works for the State Bank of India. Added Patel: “They have good quality of stuff, too.”
Swinand, the Morningstar analyst, said he thinks it’s not so much about reinvention for Sears, but focusing on the fundamentals.
“I think if they’re going to go another hundred years, they’re have to start with the basics of retailing,” he said. “Having products people want at competitive prices when people want them, having clean stores and helpful associates.”
After all, it’s the customers you want to keep happy – because they’re always right.
Collective bargaining rights for public and private sector employees are a hot button issue in our region. On Tuesday March 8, Changing Gears hosted a region wide call-in show and live chat discussing the issues facing workers in Wisconsin, Ohio, Indiana and elsewhere.
Changing Gears Senior Editor Micki Maynard and NPR’s David Schaper were in the Chicago studios with Steve. We also heard from Gary Chaison of Clark University, Kate Bronfenbrenner at Cornell, Ohio labor leader JoAnn Johntony and Ed Buker, a retired Michigan CEO.
Callers weighed in on both sides of the collective bargaining issue and discussed the economic, political and social issues at play.
Miss the show? Take a listen and let us know what you thought. Should we do more shows on this topic?
Are the Wisconsin protests becoming public employees’ equivalent of the Sit Down Strike in Flint, Mich.?
Speaking with Alison Cuddy, the host of 848, Professor Ashby said the Wisconsin protests may be seen as historically significant as the events at General Motors in 1936 and 1937.
It’s an interesting analogy, because the sit down strike resonates with labor historians as the moment that the fledgling United Automobile Workers took root at the Detroit car companies. And, while Flint got the most attention for the sit down strike there, the protests actually spread from Atlanta to Kansas City and Cleveland, just as the protests in Wisconsin have resulted in others across the Great Lakes states.
In the same way that Flint helped the UAW, Professor Ashby argues that the protests in Madison have given public — and private sector — unions a rallying point. Whether they can lead to preserving or growing union membership remains to be seen, however.
Do you remember the sit down strike, or do you have relatives who took part? We’d love to hear your memories or any stories they’ve handed down.
Welcome to the live chat for the Changing Gears call-in special, “Hard Labor.” You can hear the show starting at 2 pm ET/1 pm CT at Michigan Radio, WBEZ Chicago and Ideastream Cleveland as well as Wisconsin Public Radio‘s IdeasNetwork. Members of the Changing Gears team also are here to answer your questions.
Union employees are under fire in states like Wisconsin and Ohio, where some lawmakers are saying it’s time to do away with collective bargaining. Some business community members also think unions are keeping those states from being competitive. But union members say they’ve fought long and hard for their bargaining rights, and intend to hold on to them.
And then there’s the issue of Right to Work laws. Should Midwestern states embrace what’s long been a staple of the South? Changing Gears’ Kate Davidson took a look at that this week.
Now, we want to hear from you. TODAY at 2 pm ET/1 pm CT, Changing Gears presents “Hard Labor” a look at the contentious issues in the debate of union rights.
Steve Edwards of WBEZ will host, and Changing Gears senior editor Micki Maynard will be in the studio. Guests will include several experts on unions and Right to Work, including:
Gary Chaison – Professor of Industrial Relations at Clark University
Kate Bronfenbrenner – Director of Labor Education Research at Cornell University
Ed Buker – Former CEO of Tecumseh Products
JoAnn Johntony – President of the Ohio Association of Public School Employees
You can also join us on our LIVE WEB CHAT here at ChangingGears.info to talk with our team. We want to hear from you. Call (888) 968-7677 and join us here.
(Update: Wisconsin Public Radio’s Ideas Network also will carry the broadcast)
To many union members, collective bargaining rights and the right to organize are hard-won, sacred treasures. But some in the business community see those as impediments to making our states competitive.
Now, public and private sector unions are under fire. Lawmakers in states like Wisconsin and Ohio want to strip public employees of collective bargaining rights. Meanwhile, the conversation has begun about Right to Work laws, a mainstay of the South but long considered impossible in Great Lakes states.
Changing Gears invites you to join our conversation about those issues. Tune in next TUESDAY March 8 at 2 pm ET/1 pm CT for “Hard Labor,” a call-in program that will look at the situation from all angles.
You can hear the show on Changing Gears stations WBEZ in Chicago, Michigan Radio and ideastream Cleveland. It also will be carried by Wisconsin Public Radio’s Ideas Network — the first time WPR has teamed up with Changing Gears.
Steve Edwards of WBEZ will host, and Changing Gears senior editor Micki Maynard will be in the studio.
Our guests will include nationally known labor experts Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass., and Kate Bronfenbrenner, director of Labor Education Research at Cornell University. We’ll also talk to business leaders and union members in our states. And we want to talk to you.
While the show is on the air, we’ll hold a LIVE CHAT here at ChangingGears.info. Drop in and give your thoughts on these emotional, historical and economic issues that are so vital to the future of our region.
Meanwhile, keep listening for reports from Changing Gears on this fast developing situation.
February 16th, 2011
Throughout the Midwest, Chicago is known as the city everyone wants to come to – but that’s a huge change from 22 years ago, when Mayor Richard M. Daley took office. The city’s even changed dramatically from when I lived here before, in the late 1990s. This is the last of our three-part series on leadership, where I look at the region’s – and arguably, the country’s – most famous Mayor: Richard M. Daley.
Tourists visiting Chicago have a fairly standard list of attractions to hit: The Magnificent Mile, the Art Institute, Navy Pier – and nowadays, Millennium Park.
Richard Daley pushed hard for the 25-acre park to built near the lakefront, which is used year-round – it has an ice rink in the winter.
“It’s like our Central Park,” said Chicagoan Mary Claire, who calls it the “jewel of the city”.
Bill Carpenter has a longer perspective. He started working downtown when he was 18.
“I remember when this was all railroad tracks, and it was pretty ugly,” said Carpenter, as he warmed up inside the skate shop. Back then, at quitting time, everyone left. Carpenter said Mayor Daley changed it – he calls Daley’s someone who was “born into” the job.
Richard Michael Daley took office in April 1989. He was first mayor elected since the death of Mayor Harold Washington two years before. (To see a list of all of Chicago’s mayors throughout time, click here)
By the time Daley became Mayor, the city was mired in political and racial turmoil.
Ed Glaeser is a urban economist with Harvard University. He looks at big picture stats like per capita income to measure Daley’s legacy. In 1989, Chicago’s per capita income was almost 11 percent below the national average. From 1970 to 1990, the city’s population fell 17 percent.
Flip forward 20 years, and Glaeser said the city’s richer than the rest of the country. Population, while declining over the past decade, is still overall on the upside, Glaeser said. And crime has gotten better.
While Daley may be most famous for economic accomplishments like Millennium Park Glaeser thinks Daley’s biggest economic legacy may less glamorous, but no less important: Daley took care of the basics.
“It’s important to clear the snow,” said Glaeser, who just released a book called “Triumph of the Cities”. “It’s important to make sure the garbage is cleared away, and to make sure the streets are safe. And it’s important to make sure permitting doesn’t get overly restricted. All of these things are the nuts and bolts of city government. Getting them right will not turn around a place that doesn’t have enough private sector energy. But getting them wrong has the chance to kill off almost anywhere.
Martin Koldyke is the founder of private investment firm Frontenac. His relationship with the mayor goes way back.
“When Rich was elected, we began to see the city become a more welcoming and nurturing place for early stage businesses,” said Koldyke, who added that Daley has been relentless about pushing projects that made the city not just an attract place to visit, but to live.
Daley didn’t respond to requests for a sit-down interview for this story.
Last fall, the day after he said he wasn’t going to run for reelection, this is how he reflected on the job:
“Every day, it doesn’t matter if you are criticized, every day I had to get up and do one thing: What was the mission for Chicago? Every day, you have to get out there. It doesn’t matter what people says, or anyone says, you have to go out there, stay on your mission and complete it. You cannot be afraid of going out. That’s why you have to have passion.”
Larry Bennett teaches political science at DePaul University. He sees Daley’s passion as making him a brilliant ambassador for the city. And he sees Daley’s strong leadership style as being a combination of the old and new Chicago.
“He sort of evokes the old even though he can be viewed as a new pioneer of urbanism,” said Bennett.
The challenge now is the next incarnation of Chicago: how do you keep this new urbanism alive?
Along 75th street on Chicago’s South Side, Soul Vegetarian East has been a mainstay restaurant for 30 years.
The restaurant’s walls are lined with brightly colored artwork including portraits of Barack Obama and Michael Jackson. Right inside the front entrance, there’s a framed picture of Mayor Daley with owner Prince Asaiel Ben-Israel.
“I would give Daley an A for creating the environment that made business feel comfortable in Chicago,” said Ben-Israel. “I think he gets an F in terms of security.”
By security, Ben-Israel means crime. He thinks that’s mostly why Chicago lost its bid to host the Olympics – something Daley spent a lot of time on. And Ben-Israel says another challenge has been the economy: the Great Recession of the past few years has been especially hard on the local South Side businesses.
“We now see an institution like Army & Lou restaurants, who’ve been in business for more than 30 or 40 years they’ve had to close their doors, Izola on 79th Steet, Minister Farrakhan’s restaurant, so we’ve got to paint a true picture”.
Also holding court this morning at Soul East is Helen Sinclair. Everyone calls her “Queen Mother” and she remembers mayors as far back as the 1920s. From her perspective now, there are at least three Chicagos: the wealthiest part of the city, North Side, the Loop area downtown, and everything else.
She ticks off a list of failings: crime and violence, poor public school systems, infrastructure so crumbled that many neighborhoods lack for proper grocery stores.
She does give Daley credit for one bright spot in her Bronzeville neighborhood and elsewhere on the South Side:
“I think he’s done a beautiful job on making it pretty. It is beautiful. And I like that he likes trees.”
Architect Thom Greene helped Daley add those trees – than half a million trees all over the city, from the Bronzeville to the North Side neighborhoods like Edgewater, where Greene lives.
It was also streetscaping: signs, little beautification projects to make the city look, well, beautiful. Greene says when people come to Chicago and exclaim about how nice everything is, he tells them it really is due to Daley.
“When I was on the Streetscape committee, the mayor would have notes, and he would want to know about the colors, why are these so, they’re not enough pink in those flowers on Michigan Ave, we got to have more colors, they got to cascade more, why don’t we have a water feature,” said Greene. “He was very in tune with the little aspects and details.”
Greene says those details add up to creating spaces that attract not just people, but their spending money. It’s about creating a sense of place.
But now he feels like that’s in jeopardy. Greene worries the city’s stepped up taxation and enforcement are now at odds with the city’s original beautification efforts.
“There’s a real dichotomy with the city of Chicago trying to make itself beautiful and then charging someone $25 a year for a public right of way permit to have flowers hanging off of your building in a flower basket,” Greene said. “[It] doesn’t seem right.”
Don Carter is the director of Carnegie Mellon’s Remaking Cities Institute. He said it’s clear that Chicago has been a standout among Midwestern cities that have been able to transform into a global economy. He attributes much of the city’s success to Daley – but added it just takes strength and staying on task: “You’ve got to have a vision and you’ve got to convey that vision to your department heads and say, this is what I have in mind and help me get to that point.”
A new era begins next week, when Chicagoans will face a ballot that for the first time in more than 20 years doesn’t have a Daley name. In fact, there’s been a Daley in the mayor’s office in Chicago for more than 40 of the past 55 years.
But even Daley himself says that doesn’t matter:
Asked that day about how should replace him, Daley declined to say, adding: “This office doesn’t belong to me. It belongs to the people of our city.”
Urban economists like Glaeser, from Harvard, agree. Even though Daley has received much of the credit — and some the blame — for the city over the past 20 years, he says it’s the workers, small businesses and everyone else who are the real leaders in propelling Chicago’s economy.
Hat tip, by the way, to my WBEZ colleague Sam Hudzik for providing that recording from that press conference. Here’s more of what that day was like:
CHICAGO – People across the region are digging out from one of the worst blizzards in recent memory. But at the Chicago Board of Trade, this blizzard may be a boon for business. Here, I look at a futures market based on snowfall that’s the first of its kind in the world.
The average annual snowfall at Chicago’s O’Hare International Airport is about 37 inches. Given that more than 20 inches fell this week, you can bet the year’s total will be much higher. For people responsible for the cleanup, those additional inches are adding up to many extra hours of work.
At a local factory on Chicago’s North Side, Raul Montesyoca says it usually takes him about an hour to clear the snow at a local factory on Chicago’s North Side. Not so today.
“Oh, I was here this morning for four hours,” he said, pushing a snow blower around the parking lot. It’s close to 3 p.m., and he’s come back, for another two hours of work.
Montesyoca is a small player in a snow removal business. But the entire industry is actually as large as $8 billion. So it’s natural that eventually it would spawn a new financial instrument: snow derivatives. (Curious about what a derivative actually is? There’s actually an entire market based on trading the weather. If you’re interested, check out the Weather Risk Management Association. As they like to say: “Weather is no risk for poor earnings”.)
Here’s how it works: Most major snow removal contracts are calculated by the season. A contractor is paid a set fee to clear all the snow that falls that winter – regardless of how deep it is. In the past, snow removal companies would simply have to end up cover the extra costs if more snow falls. But that’s not the case anymore, according the CME Group’s Tim Andriesen.
“Everybody says you can control everything but the weather. Well, we can’t control the weather, but we can help you mitigate the risk of weather on your business,” he said.
The CBOT is the world’s oldest – and largest – futures and options market exchange. Its floor is famous for a place where people trade on the future price of commodities like corn, pork bellies – even milk.
Two years ago, they created contracts based on the amount of snow that falls – it’s basically like an insurance policy. They’re not traded in a pit like older contracts – it’s all done electronically.
The CME offers the contracts based on the official airport snowfall tallies from O’Hare, Minneapolis/St. Paul, Detroit and Boston, as well as New York’s LaGuardia and in Central Park.
Andriesen explains how it works:
“If you’re an airline, and you have to cancel a bunch of flights, you’re forgoing a lot of revenue, so our products would allow people to hedge against that extra cost of having to deal with the weather,” he said.
The creator of this idea, Jeff Hodgson, came up with it while he was a broker at Merrill Lynch in Chicago. He had a client with a road salt business.
“As you can imagine, he had a need to hedge that weather exposure,” said Hodgson, who left Merrill Lynch to start the Chicago Weather Brokerage. “He [was] buying millions of dollars of salt and had no way of controlling that risk.”
These snow futures contracts are a tiny market compared to say, oil futures. But it’s really taken off – Hodgson has gone from doing $500,000 worth of contracts to around $3 million in a year of business.
And the blizzard of 2011 is like a huge commercial for this market.
“They realize the value,” he said. “People say, ‘Wow, this is a storm that I didn’t see coming. And I just lost a lot of money on my business or I could have made a lot of money’.”
Contracts can be purchased by the month, or for the entire snow season, which for them runs until March.
But not to worry – the business doesn’t end with winter. In the spring, the Chicago Weather Brokerage starts selling contracts based on rainfall.
January 21st, 2011
Welcome to the new and improved Changing Gears podcast. Each week, we’ll be offering you headlines from around the region, a story of the week, an essay on ways to improve our region, and some information about events going on in our states.
Up this week: Dan Bobkoff takes a look at the notion of highways. Do they no longer represent the idea of progress? And Grand Rapids entrepreneur Rick DeVos shares his thoughts on what the Midwest needs most.
In this week’s headlines: American Airlines teams up with United to sue Chicago over the proposed O’Hare airport expansion, we take a look at the newly elected Republican governors of Wisconsin, Ohio and Michigan, and a preview of some of our Changing Gears events.
For podcast extras, check after the jump.
NEWS FROM AROUND THE REGION:
One of our headlines focused on the newly elected Midwestern governors. Colleagues in Wisconsin, Ohio and Michigan pitched in to provide Changing Gears with a story about them. You can hear the full story here.
STORY OF THE WEEK:
We mentioned in Dan’s piece that you could visit us here for more information on his removing highways story. If you’re interested in his list of cities across the world that are removing highways, you can find that here.
NOT DEAD YET:
We want to broadcast your community events! Give us a call at (888) YOUR-NPR, or email us at ChangingGears@umich.edu.
CHICAGO - When you talk about a digital divide, you’re probably thinking of inner city kids who don’t have ready access to the Internet. But there’s another group that looks at the digital divide with a growing sense of urgency: unemployed workers. Changing Gears is public media project looking at the reinvention of the industrial Midwest. In this story, we look at how hard it is to find a job when you don’t have the skills or access to technology.
Darlene Williams has been out of work since 2005. During that time, she feels like she’s been left out of the digital revolution.
“My computer skills as far as navigating on the Internet since I’ve been off work have really, really fallen by the wayside,” said Williams, who used to work in human resources. Now, she realizes, everything has changed – even the way people use software like Microsoft Office.
Williams lives in Englewood, on Chicago’s South Side. She doesn’t have a home computer. That means to actually apply for jobs, Williams has to depend on outside resources like the library or where I met her, at the Family Net Center. It’s in Auburn Gresham, one of Chicago’s newest five Smart Communities. But Williams also worries that she just doesn’t have the technological savvy you need these days to land a job.
“It’s actually kind of intimidating,” said Williams. “My nieces who are eight or nine are just amazing on a computer. So when I’m sitting there, interviewing, or I’m contemplating going on an interview and I’m sitting there with 22, 23-year-olds, I’m like, “oh no!”,” she said, laughing, adding: “You don’t stand a chance.”
University of Illinois at Chicago professor Karen Mossberger said it’s just a fact these days that even the most basic work requires a level of web savvy that wasn’t the case even a few years ago.
“It’s becoming more integrated not just into high tech jobs but into all kinds of old economy jobs. Even fast food restaurants, offices, manufacturing, trucking and delivery – there are going to be some aspects of technology involved and that’s going to become even more true in the future,” said Mossberger, who teaches public administration. “People who don’t have the basic skills to use technology are at a disadvantage.”
People who don’t lack those skills are also at a disadvantage when it comes to how much money they make – especially compared with coworkers who have the same level of formal education. Mossberger’s done research that shows even among workers with a high school education, those who use the Internet at work on average, make $111 more a week. (To read more of Mossberger’s research on the digital divide, click here.)
She sees digital competency as important not just for individuals, but also for communities and ultimately, the Midwest as a whole as the entire region transitions out of “old economy” jobs that don’t use as much technology.
“I think the region has a challenge in terms of trying to fit into the digital economy – not just for individuals, but for labor markets, and the economy,” she said.
Back at the Auburn Gresham Family Net Center, Desmond Hart is using the computers to apply for work, but, as he says: “I’m not real comfortable with doing it online.”
He’s 34, and been out of a job for two years. He was a carpenter, and he’s worked as a nursing assistant. He also went back to school to be certified to work on heating and cooling systems.
He spends hours here, almost every day, using their computers to apply for jobs because like Darlene Williams, Hart also doesn’t have home internet access. In Auburn Gresham, about 47 percent of residents have home Internet access. Compare that to 70 percent for the rest of Chicago. (Here’s a 2008 recent report on technology use throughout the City of Chicago.)
The Greater Auburn Gresham Development Corp. is hoping to improve that with its new Digital Literacy course, said the organization’s technology organizer, Jimmy Prude:
“Some of the things we realize people don’t necessarily understand when they come into the everyday Digital coursework is how to maneuver through the computer, how they understand their computer system, how do they get it work for them,” he said.
The class is funded by the Chicago Smart Communities program, which is getting federal stimulus money. Other states have similar initiatives, like the Connect your Community project. That’s a $25 million multistate program that’s trying to get four communities more plugged in: Detroit, Cleveland, Akron and Lorain, Ohio.
For the past six weeks, about a dozen people – including Darlene Williams – have been enrolled in first Everyday Digital Class in Auburn Gresham.
Students who qualify will receive a free laptop at the end of the program.
About half the class is made up of seniors like Billye Wilson.
“My son and my grandson often tell me: You need to get on the Information Superhighway and I say, ‘It’s going a bit too fast right now’,” said Wilson, who is 62.
Even though she’s retired, she’s still looking for work. She saw a job once for working for Commonwealth Edison at home, but it required having a computer – and some basic technology skills.
Now that she’s finished the course, Wilson says she feels more comfortable jumping on that Highway.
“It was quite intimidating, getting on the computer, as far if you pushed this button, the world is coming to an end,” she said, laughing. “Now I’m able to go to the library surf the web. Who knows, maybe soon I’ll be able to mount that big web, you know, ride on into shore.”