Sears: Just what happened to the Amazon of yesteryear?

It was, until being overtaken by Walmart in 1989, America's largest retailer - a pioneer in mail order.

As the US became the world's most prosperous economy, attracting millions of migrants at the beginning of the 20th century, it was the company that more than any other helped them fulfil the American dream of a home full of up-to-date gadgets and modern home furnishings.

At its peak, its sales were equivalent to 1% of US gross national product.

Yet now Sears is fighting for its life.

The company, which still has 886 stores across the US, is preparing to file for bankruptcy protection ahead of a key $134m (£102m) debt repayment due on Monday.

The store chain which had the slogan "Where America Shops" traces its origins back to 1886 when Richard Sears, a railway worker, began selling watches as a sideline.

He rapidly teamed up with Alvah Roebuck, a watch repairman, with the pair launching a mail-order business selling watches and jewellery the following year.

By the mid-1890s they were selling other items, including cars, sporting goods and sewing machines. Mr Roebuck sold his stake in the business shortly afterwards and a new partner, Julius Rosenwald, came on board.

Until then, Sears had been focused on rural America, but Mr Rosenwald spotted an opportunity in the country's fast-growing cities. He opened the group's first department store, in Chicago, in 1925 and, over time, the stores became more important than the mail order business.

That is not to say the mail order business did not evolve. In 1933, it produced its first Christmas gift catalogue specifically containing toys, called the Sears Wish Book.

Gordon Weil, author of Sears, Roebuck, USA, told the Wall Street Journal this week: "At a time when the country was going through the Great Depression, struggling to establish a sense of identity, [Sears] created a sense of security and reliability.

"The Sears catalogue was everywhere. In an age before there was the internet, it was in some respects the equivalent of a search engine, that united the country.

"Everyone had access to the same giant catalogue…that had all kinds of things from tools to appliances to homes. It went from there to being the source from which rural America in particular could buy anything it wanted, even though there were no local stores."

It was a business that inspired trust among its customers. It was one of the first retailers anywhere to introduce the concept of "satisfaction guaranteed or your money back" and its slogans, which also included "Sears Has Everything", helped create a common sense of purpose among American consumers at a time when US society was a lot more egalitarian.

So what went wrong? While some have blamed Amazon, that is rather too simplistic an explanation, although it may have been true in the last decade or so.

A likelier explanation is that the shared sense of purpose in America which made Sears great was gradually eroded.

Wealth inequalities increased and different sets of consumers emerged. Consumers started to want different things from each other and, by extension, from different retailers.

Better use of data and management information meant retailers could better segment those consumers and target them more specifically.

Diversification into other products and services - insurance in 1931, stockbroking and commercial property in the 1980s - may also have hastened the demise.

A sense grew in the 1970s that Sears had become just too stodgy as a business and took its eye off the ball. Its share of general merchandise sales in the US fell from 5.61% in 1978 to 4.07% in 1987.

According to Mr Weil, Sears was also late to realise the importance of the power of discounting, as practised by rivals like Kmart and Walmart, to become "just another store", but that is only part of the story.

It had also fallen behind some of the more up-market department store operators and, as a result, found itself drifting in the no-man's-land between the up-market players and the discounters.

By the end of the 1990s, as internet shopping gradually took hold, it was locked into a spiral of cutting jobs and closing stores in order to maintain profitability.

A merger with the much younger Kmart - which, like Walmart, had opened its first store in 1962 - followed in 2004 and the name Roebuck was finally dropped.

That deal was engineered by Eddie Lampert, a hedge fund billionaire, who today is the controlling shareholder and chief executive.

Yet the business continued to struggle for relevance and the deal did little to stem the inevitable loss of market share to the likes of Amazon.

The company has been loss-making since 2010 and, during the last decade, has shut nearly three-quarters of its stores.

Its stock market valuation, $11bn at the time of the merger with Kmart, has shrivelled to just $37m.

Mr Lampert is reportedly trying to arrange a deal that, while in bankruptcy protection, see Sears close hundreds of its stores but at least stay in business.

Many of its creditors would rather see it liquidated and Mr Lampert slung out. The company has debts totalling $5.5bn although Mr Lampert is its biggest single creditor.

The decline of Sears has been a tragedy for hundreds of thousands of employees, for shareholders and for the many millions of customers that have shopped there and loved the brand down the decades.

But nothing lasts forever. It is a lesson for even the most successful retailer worldwide. Because Sears itself was very much the Amazon of its day.