Eastward the Empire

Sixteen years ago Sears, Roebuck & Co., one of the two great merchandising organizations built on the agrarian economy of the U. S., undertook a major invasion of the industrialized East. Eastern headquarters were established at Philadelphia and to this new satrapy, Julius Rosenwald, Chicago's great mail order magnate, sent his own son, quiet, hardworking, philanthropic Lessing Julius Rosenwald. The great Julius died, and four years ago Son Lessing became board chairman of the firm. Even then he did not return to Chicago. Once a week or oftener he taxis thither by air to confer with Sears' President Robert E. Wood, but his home is in Philadelphia and most of his work is done in his office in the tower of Sears Roebuck's great $8,000,000 store far out on broad Roosevelt Boulevard.

This desertion by its heir of the main capital of the great mail order empire is partly due to personal reasons -- he and his family have become confirmed Philadelphians -- and partly to the course of empire. The mail order business is by nature best designed for rural trade, and the great rural regions of the U. S. lie 1) in the Mississippi Valley, 2) in the North Central States (Dakotas, Minnesota, Wisconsin) and 3) in the old South. The growth of cities, the building of roads that took farmers to town, the competition of chain stores, led Sears Roebuck in 1925 to begin opening retail stores. By 1929 it had upwards of 300 stores, today 400. This year, as it happens, the firm is again back to about the 1929 level of business. Results for the first six months indicate that sales will nearly equal 1929's total of $443,000,000 and profits will reach, if not 1929's $30,000,000, the $25,000,000-$27,000,000 level of 1927-28. The difference is that whereas the greater proportion of 1929 sales was by mail order, today mail orders account for only some 40% of Sears Roebuck's business and more than a third of the stores which are now its cornerstone are situated in the comparatively small but populous area of the northeastern seaboard States.

Therefore, although Sears Roebuck is wholly reticent on the geographical distribution of its business, it is a fair inference that Lessing Rosenwald's preference for his subcapital in the East has been justified. Last week there came evidence that Mr. Rosenwald was further justified in keeping his home, family and collection of Rembrandt etchings in Philadelphia. With a great flourish Philadelphia's Mayor S. Davis Wilson put his name to the papers by which Sears Roebuck rented some three-quarters of one of the city's piers. For Philadelphia, that meant a boost for her long sickly maritime trade. For Sears Roebuck it was an improvement on a distribution system which has had growing burdens placed upon it. Year ago Sears International, an export subsidiary, was organized to merchandise washing machines, ironers, refrigerators, heaters, radios, etc. in Europe and Africa. This trade has more than doubled in a year. The new pier will act as a shipping point for this overseas business. More than that, when the ice comes off the Great Lakes next spring, a motor ship service will be opened between Sears factories and sources of supply in the Great Lakes ports, to carry manufactured goods by way of the Erie Canal and Hudson River to Philadelphia whence they will be 1) distributed overland to nearby points, 2) transhipped to outlets on the Eastern seaboard, or 3) shipped abroad.

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