In 1886, a Chicago jewelry company shipped an order of gold filled watches to a Minneapolis jewelry store. When the jewelry store refused delivery a station agent by the name of Richard Sears decided to purchase the shipment and try to sell them to other station agents. This proved to be successful for Richard Sears, and in 1886, Richard Sears began a company known as R.W. Sears Watch Company in Minneapolis. A year later in 1887, Sears moved his new found business to Chicago, and placed an advertisement in the newspaper for a watchmaker. The ad received a response from an Indian man by the name of Alvah C. Roebuck.

Sears hired Roebuck and in 1893 the corporate name of the firm became Sears, Roebuck and Company. Business turned out to be very profitable for the company and towards the turn of the century the mail order industry for Sears, Roebuck and Co. began to take-off. As of 1895, Sears had introduced a mail order catalog that consisted of 532 pages offering shoes, women's garments, wagons, fishing tackle, stoves, furniture, saddles, bicycles, etc. that helped customers in rural areas receive merchandise that they might not be able to receive at local stores.

In 1901, needing more financial support, Sears for the first time offered common and preferred stock in the open market and became publicly owned. In 1906, Sears expanded and opened an office in the Dallas, Texas region, expansion was beginning. In 1925 the opening of retail stores began, and by the end of 1927 Sears had twenty- seven stores in operation, and only one short year later in 1928 one hundred ninety two stores were in operation. Once again, the expansion at least doubled itself and Sears in 1929 was operating three hundred nineteen stores and by 1933 four hundred were placed around the country. This expansion was massive and remarkable given that only six short years before twenty seven stores were in operation.

In 1931, Sears noted the need for car insurance in an environment that was becoming engorged with this convenient form of transportation. Hence, the beginning of Allstate Insurance Company which became a fully owned Sears subsidiary.

In the middle part of the century, Sears went through many changes and expansions making it one of the leading, if not top, retail contenders. One aspect that Sears developed and perfected was the idea of developing the store around the merchandise. What this means is that a selling floor plan would be developed, where merchandise was to be placed within the store, and then the design of the outer building would be developed.

Sears reached its pinnacle in the 1970s. In 1974, Sears completed the 110-story Sears Tower in Chicago, which became the world's tallest building, a title it took from the former Twin Towers in New York. Upon moving out of Chicago, Sears sold the Sears Tower in 1988. In the sale contract of the tower, Sears retained its naming rights to the building until 2003, but the Sears Tower retained the name until early 2009, when London-based insurer Willis Group Holdings, Ltd. was given the building's naming rights to encourage them to occupy the building. Sears moved to the new Prairie Stone Business Park in Hoffman Estates, Illinois, between 1993 and 1995.

On November 17, 2004, Kmart Holdings Corporation announced it would acquire Sears, Roebuck, and Co. for $11 billion after Kmart completed its recovery from bankruptcy. As a part of the acquisition, Kmart Holding Corporation, along with Sears, Roebuck, and Co., was transformed into the new Sears Holdings Corporation.

By 2010, the company was no longer profitable; from 2011 to 2016, the company lost $10.4 billion. In 2014, its total debt ($4.2 billion at the end of January 2017) exceeded its market capitalization ($974.1 million as of March 21, 2017). Sears declined from more than 3,500 physical stores to 695 US stores from 2010 to 2017. Sales at Sears stores dropped 10.3 percent in the final quarter of 2016 when compared to the same period in 2015. The sell off had begun and continues to this day.