Kevin: January 25th, 1993, Hoffman Estates, Illinois, the headquarters of Sears Roebuck and Company. Arthur Martinez has been here five months. Sears hired him away from Saks Fifth Avenue and gave him one job. Save the stores. Today, Sears is about to close 113 department stores, cut 50,000 jobs, and kill the big book. The big book is the Sears catalog. fifteen hundred pages mailed to millions of American homes, selling everything from school clothes to washing machines. Sears has been mailing it since the eighteen nineties. Long before the internet, the book let people who lived hours from any store shop at their own kitchen table. The final edition sits at a printing plant in Chicago right now. But there's another option on the table. Martinez can shrink the book and keep the machinery behind it. The warehouses, Phone banks and the delivery network. But he turns it down and Wall Street applauds. Two weeks earlier, in White Plains, New York, a company called Prodigy announced it has passed 2 million subscribers. Prodigy is an online service, home computers dialing in over telephone lines for news, banking, and shopping on a screen. And this is years before the web. And Sears owns half of it. So what if Martinez cuts the catalog down instead of killing it? Let's hit Control-Z. Welcome to Control-Z Rewritten, the podcast where we take the biggest decisions in history and ask: what happens if they go the other way? Not random what-ifs, real 50-50 calls with alternatives that were actually on the table. One decision where we hit Ctrl-Z, try it the other way, and see what changes. In 1972, Sears started building the tallest skyscraper on Earth. That same year, three out of every four Americans visited one of its stores, and half of the households in the country carried the Sears credit card. Sales at Sears equaled 1% of the entire American economy, and in the late 1960s, the company sold more than its next five competitors combined. Underneath all of that was the catalog. Richard Sears started the business in the 1880s by selling watches through the mail, and within a decade, the book had expanded from watches to clothing, tools, furniture, and farm equipment. And it worked because of timing. Railroads now reached almost every county in America, and a new government program called Rural Free Delivery sent mail carriers directly to farmhouse doors. A family 50 miles from the nearest town. Could suddenly order a stove, a suit, or a sewing machine, and have it arrive by train. Between 1908 and 1940, Sears even sold entire houses through its pages, kits shipped out by boxcar and assembled by the families who bought them. By the second half of the century, a single printing plant in Chicago was producing up to seven million catalogs a year. But by the early 1990s, the catalog ran at a loss. And so did much of the company around it. When the sales figures for 1990 came in, Walmart posted $32.6 billion, Kmart posted just over $32 billion, and the Sears retail division posted just under. Third place. The company had held the top spot in American retail since 1900, when its catalog overtook a rival mail order house called Montgomery Ward. And now two discount chains had Past it in a single year. In 1992, Sears reported a loss of $3.9 billion, the largest any retailer in North America had ever recorded. Most of that came from one-time accounting charges, but the losses underneath were structural. The catalog division alone had lost between $135 and $175 million in each of the previous three years. And the corporation was also selling off the Allstate Insurance. The Dean Whitter brokerage and the Discover credit card it had invented only six years earlier. Killing the catalog became the most praised move of Martinez's tenure. For more than 30 years, business schools and retail historians have treated January 25th, 1993 as the rare day the company chose correctly. The reasoning goes that the book was a relic and that home shopping belonged to a vanished rural America. The idea was that no executive in 1993 could have anticipated people buying things through a computer. But Sears had anticipated exactly that nine years earlier. In 1984, the company joined IBM and CBS Television Network to build a shopping service for home computers. CBS dropped out two years in. But Sears and IBM kept going, and they launched Prodigy across the country in September of 1990, and they would eventually sink more than a billion dollars into it. Shopping was central to the design from the start. The plan was to charge a low flat monthly fee, then make its profit on advertising and merchandise sold through the screen. The service already had one success story. In 1989, an entrepreneur named William Tobin opened a business called PC Flowers on Prodigy. He connected the service to FTD, the network of 25,000 local florists, so a subscriber could type in an order and have a bouquet delivered across the country that same day. By the early 1990s, PC Flowers was selling more than $6 million of flowers a year, and it ranked as the most successful storefront on the service. Now, here's where we press Ctrl Z. It's late January of nineteen ninety-three. in Hoffman Estates, and Martinez reads the two reports on his desk as one problem. The catalog loses money as a printed book. It's produced twice a year and mailed to millions of homes, whether the family orders or not. The machinery behind the book, the warehouses, the phone banks, trucks, and the credit files on tens of millions of households, they still deliver to any address in America within days. So he decides To split the two apart. On January 25th, Sears announces it'll cut the big book down to a fraction of its size and move the full catalog onto Prodigy. The 113 stores still close, and most of those layoffs still happen. But the paper dies and the machine lives. We're now in the alternate timeline, and Martinez begins by sending merchants to White Plains. Sears catalog buyers had spent their careers filling 1,500 pages a year, deciding which washing machine earned a photograph and which power drill earned three sentences of copy. Through the spring of nineteen ninety three, those same people rebuild Prodigy's shopping section, item by item. Every product Sears sells becomes searchable on the screen. A subscriber types in a Sears customer number their household has held for 20 years, the card on file covers the purchase, and the order goes straight to the same warehouses that served the printed catalog. Now, the screens themselves are crude. Home modems in 1993 moved data so slowly that a single photograph takes minutes to load. So the store displays only text, product names, specifications, and prices. That limitation costs Sears. Almost nothing. A customer buying a Craftsman socket set or a Kenmore dryer really already knows what it looks like. What they want is the model number, the price, and a delivery date, and the service provides all three faster than a phone call. In June of 1993, the partnership has its first fight. Prodigy has been charging a flat $12.95 a month for unlimited use. And the economics are starting to collapse because subscribers spend their hours on email and message boards, which earns the company nothing extra. In our timeline, Prodigy responded that month by billing its most popular features by the hour, and tens of thousands of subscribers quit in protest. But in this timeline, Prodigy makes the same billing change with one carve out that Sears forces through as the half owner. The hourly meter applies to email and the message board, while shopping stays free, because Sears now makes its money when the merchandise ships. Sears aims the machine at Christmas of 1994. Every fall since the 1930s, the company had mailed the wish book, the toy catalog that children marked up with pens and left open on kitchen tables as a hint. This year, the toy book goes on to Prodigy. And at midnight, after the kids are asleep, parents can check whether the Sega Genesis is in stock, order it, and have it arrive by mail within the week. Subscriber numbers climb through the holidays, and for the first time in its 10 year existence, Prodigy's shopping revenue covers a meaningful share of its costs. Sears ships those orders from fulfillment centers built decades earlier and staffed by catalog veterans who kept their jobs in 1993. Now let's go to Seattle. In the spring of nineteen ninety-four, Jeff Bezos is a senior vice president at DESHAW, a Wall Street investment firm. And he comes across a statistic showing that the usage of the World Wide Web is growing 2300% a year. Now I'll say that again. 2300% a year. So he decides to build an internet store. He writes out a list of 20 product categories, he studies the top candidates. And he lands on books, because no physical store can stock the millions of titles in print, and a website can list every one of them. That's the real history. And in this timeline, he's gonna make that identical choice for one additional reason. General merchandise on a screen is taken. Sears is doing more than a billion dollars a year of it on Prodigy, backed by a national warehouse network and half of the country's credit accounts. And no startup with four employees can attack that position. So, Bezos quits his job on june thirtieth, nineteen ninety four, drives to Seattle, and incorporates Amazon on July fifth. A year later, Amazon opens for business as a bookstore, because a one hundred year old competitor already sells everything else. In 1995, the World Wide Web arrives for ordinary households, and it immediately makes Prodigy obsolete. Prodigy is a closed system. Subscribers dial into one company's computers and see only the pages it built, the way cable customers see only the channels their provider carries. The web is the opposite, an open network where anyone can publish a page and every user can visit it. Once browsers like Netscape make the web easy to use, a closed service charging monthly fees has no future. Sears is ready for the shift because the Prodigy operation taught the company how to sell on a screen. In September of 1995, it opens Sears.com and the site sells from its very first day. The full catalog moves onto the web with search, credit accounts, and delivery dates intact. Transferred from a service that has been processing online orders since 1993. Prodigy shrinks into an ordinary dial-up internet provider, and the customers follow Sears to the open web. That month, on the other side of the Atlantic, a German company makes the same move. Otto Versantz is Germany's giant mail order house, founded at Hamburg in 1949 with a catalog of 28 shoe models. On September 5th, 1995, Otto opens its own web store, and it keeps its warehouses and its delivery services while moving the operation onto the screen. In the real world, Otto managed the shift by itself, and by 2000, it stood as the second largest online retailer on Earth behind Amazon. But the Sears of this timeline runs the identical strategy with 10 times the assets and a two-year head start. Between 1997 and 2000, Wall Street funds hundreds of internet stores. The era produces names like pets.com and eToys, companies that sell dog food and toys online and lose enormous amounts of money doing it. The cash goes to two expenses. They have to build warehouses, and they have to convince strangers to type a credit card number into a computer. Sears solved both of these problems a decade ago. Its fulfillment centers are up and running. National surveys once ranked it the most trusted economic institution in the country, and more than 50 million Americans already carry its card. Amazon grows through the same boom. It goes public in May 1997 at $18 a share, it expands spectacularly, and spends the late 1990s building a national warehouse network with borrowed money. In the real timeline, the company didn't earn a full year profit until 2003. In this timeline, it succeeds anyway, moving from books into music and movies, because Sears never really wanted those categories, and the old catalog didn't even carry them. So two internet giants take shape, with Amazon in media and Sears in Everything for the House. In March of 2000, the stock market bubble bursts. And over the next two years, nearly all of the investor-funded internet stores die. Pets.com shuts down nine months after selling its first shares to the public. The Survivors are the company whose online stores run on infrastructure that already exists. The Sears Internet division earns a profit straight through the crash because its websites send orders into warehouses the company has already owned for decades. The discounter that passed Sears back in 1990 files for bankruptcy in January of 2002, after Walmart spent a decade underselling it. An investor named Eddie Lambert, who runs a private fund for wealthy clients, buys up Kmart's debt for pennies on the dollar and takes control of the chain as it comes out of court protection. In our timeline, Lampert's next purchase came in 2005 when he merged Kmart. With a severely weakened Sears in an $11 billion deal. He cut investment in the stores, the combined company declined for about 13 years, and the end was a bankruptcy filing in 2018, with about five American locations left today. But that plan required Sears trading below the value of its own property. The Sears of this timeline is a growth company with a rising stock price, and Lampert's strategy only works on companies in distress. He makes his money instead by selling Kmart's real estate parcel by parcel and winds the chain down to its last store by 2019. In this timeline, Lambert's retail career begins and ends with Kmart. By 2005, Amazon and Sears have divided American online shopping between them. Amazon runs the media side, books, music, movies, and a marketplace, which is a system that lets outside merchants sell their own products on its website in exchange for a cut of each sale. Sears runs the household side, washing machines, refrigerators, tools, lawnmowers, and furniture. In 2006, Amazon opens a second business with no connection to shopping. The company has spent years building giant data centers to run its own website, and it begins renting that capacity to outside businesses over the internet, a service that comes to be called cloud computing. The division, named Amazon Web Services, grows into the company's most profitable operation. Even with Sears thriving, Seattle still produces one of the most valuable corporations. on Earth. Sears sells the merchandise that is hardest to deliver. A book ships in an envelope. A refrigerator takes two workers, a truck with a liftgate, and an installer who can connect a water line. Sears has employed those crews for generations, and its repair technicians already make house calls across the country. Kenmore Appliances, Craftsman Tools, and Die Hard Batteries, all brands the company owns outright, become the top sellers of American online retail. By the 2010s, the blue Sears delivery van is as ubiquitous on American streets as the brown UPS truck. In 2005, Amazon introduces Prime, an annual membership built around two-day shipping. Newspapers cover the launch as a catch-up move, because Sears cardholders have ordered with two-day delivery since the late 1990s. Walmart Stays the largest retailer on Earth. Its supercenters keep underselling every department store in the country, and it spends the 2010s building a website of its own to fight two rivals at the same time. Shopping malls empty out in this timeline on about the same schedule as in ours. Sears continues to close weak locations, and by the mid-2020s, it operates a few hundred stores, down from more than 700 in the 90s, with most of its revenue coming through the website. Most of the 50,000 layoffs from January of 1993 happen in this timeline too. Our control Z keeps the fulfillment centers open, which saves roughly half the catalog workforce. Those centers hire through every holiday season, and by the 2010s, they employ more Americans than the big book operation ever did. In 2020, the pandemic closes stores nationwide and pushes tens of millions of households into ordering. Everything online. In our timeline, the biggest winners of that surge were Amazon and Walmart. In this one, Sears takes a massive share, and its installation crews spend two years carrying treadmills, freezers, and home office furniture through American doorways. Today, in 2026, Sears runs its online empire from the campus in Hoffman Estates it opened in 1992. The skyscraper the company began building in 1972 still carries its name. In our timeline, Sears had moved out in 1992 with the naming agreement lapsed, and in 2009 the rights went to Willis Group Holdings, a London insurance broker. In this timeline, the company renews the rights every decade, and the tallest building in Chicago keeps the name it was built under. The Big Book survives as an app. The icon shows the cover of a catalog. And the software behind it lists every product the company sells. Richard Sears mailed his first watch 140 years ago, and the company still sells to Americans who have never set foot in a store. The story people tell about Sears is that the internet caught it by surprise. In that version, an old paper company got run over by a technology its executives never saw coming. The timeline we just walked through shows the opposite. Sears saw computer shopping coming nine years before Jeff Bezos read his growth statistic, and it spent more than a billion dollars preparing. In January of 1993, The company owned a delivery network reaching every address in America and the largest online service in the country at the same time. The two assets sat in separate states, run by separate teams, reported in separate columns of the budget. Martinez understood what he was ending. At the announcement, he told reporters, this was a very difficult decision because the catalog is our heritage. It's how Sears started. He said that. And then he ended it anyways, because the heritage lost $135 million a year, and his job was the stores. And Wall Street agreed with him. Analysts praised the decision within hours, and one of them singled out the choice to eliminate the catalog rather than shrink it as proof that management was finally serious. That grate held for three decades. Of all the moves Sears made during its long decline, killing the big book. Is the one that business schools still file under discipline. In the spring of nineteen ninety-four, a year after the final big book mailed, a 30-year-old senior vice president at a Wall Street investment firm wrote out his own list of products that could be sold through a computer. He chose books, he drove to Seattle, and he started building the company Sears had already been twice. The real Sears eventually recognized what it had thrown. In 2002, it paid $1.9 billion for Lands End, a Wisconsin clothing company that sold through the mail with warehouses and phone banks of its own. Nine years after dismantling the biggest catalog operation in America, Sears bought a small one back at full price. Decisions don't get do-overs, but on this show they do. If you like the show, please rate and subscribe wherever you happen to be listening. It helps other people find us and it allows me to understand whether they're actually enjoying it. Until next time, I'm Kevin Perez Allen. Thanks for hitting Ctrl Z me. Control Z Rewritten is hosted, written, edited, researched, and produced by me, Kevin Perez Allen. If you have a coin flip decision from history you'd like to see reversed on a future episode, find the show on YouTube at CTRLZ Rewritten, all one word, and leave a comment.