A Giant in Global Retailing
Robert Elkington Wood as a young military officer.
By Megan McKinney
General Robert Elkington Wood was the first of two men with identical surnames who followed Julius Rosenwald in maintaining Sears’ ascendency through decades of a changing marketplace.
The iconic Chicago retailer and former mail order house, once known as Sears, Roebuck, is now in its 134th year. However, it has never been more in the news. Earlier this year we published a five part series on the family of Julius Rosenwald, the man who built the illustrious company. Now, as what remains of a once robust business faces new challenges, we are picking up the story of the company with the two men who led Sears following Rosenwald. And, interestingly, some of the continuing tests the legendary merchandiser encountered through the years may sound like a preview of our more recent era.
An immense post-World War I boom led the United States into a national recession, causing Sears stock to fall from a high of $243 a share in early 1920 to less than $55 at the end of the following year.
In 1921, at the suggestion of Sears Vice President and Treasurer Albert Loeb, Julius Rosenwald made what was in effect a $5 million dollar donation to Sears and saved the business. But the time had come for fundamental change.
Albert Loeb was both a top Sears executive and a close friend of President Julius Rosenwald.
Enter Robert E. Wood, a West Point graduate, who in 1905—after serving two years in the Philippines–was ordered to the Panama Canal Zone. In 1915, with the completion of the Canal the previous year, Wood retired from the military to enter the business world. However, within two years the United States was at war, with Wood serving as a colonel in the Rainbow Division. Ordered back to Washington, he became head of the Army’s Quartermaster Department, with the rank brigadier general. When he permanently returned to civilian life in 1919, he brought with him the Distinguished Service Medal, the Legion of Honor from France, and the Order of St. Michael and St. George from Great Britain.
Robert E. Wood.
Montgomery Ward president Robert Julius Thorne, who had been Wood’s wartime aide, hired the retired brigadier general to work for him at Ward’s. Wood responded with a welcome concept, one that was thoroughly original to the mail order industry: freestanding stores. He saw bricks and mortar as the future of what had been strictly a catalog business, and convinced Ward’s management to install retail outlets. This strategy enabled the company to clear out inventories that had accumulated during the 1920-21 recession. But in 1924 when the general campaigned for continued retail expansion–forecasting the transformation that Henry Ford’s automobile would create in farmers’ buying habits–Ward’s management disagreed and fired him.
Automobiles had already begun lining up outside Montgomery Ward & Co. stores in rural areas before General Wood’s expulsion.
This created an opportunity for Julius Rosenwald to bring to Sears the man whose ingenuity had so benefited his business rival. He offered Wood a position as vice president for Factories and Retail Stores, which Wood accepted. At the general’s suggestion, Sears opened retail stores along highways in rural areas, as well as in parts of the country that Wood’s research showed would have the greatest increase in population. The maneuver was successful and Wood became Sears’ president in 1928.
Montgomery Ward’s loss was Sears, Roebuck’s gain—and General Wood’s triumph.
By the dawn of the 1930’s, Sears’ retail stores were outselling their mail order business and another plan was on the move, Allstate Insurance. It had begun in 1925 with a national contest to choose a name for the tires Sears, Roebuck was selling through the catalog. Of the two million submissions, the name Allstate was chosen—for the tires.
Robert Wood and Julius Rosenwald with the Allstate tire.
Then, over a bridge game during their mutual evening train commute, Wood received a proposal from North Shore neighbor and insurance broker Carl L. Odell: what if Sears sold auto insurance by direct mail? Wood liked the idea, took it to the board and within a year—under the leadership of Rosenwald’s eldest son, Lessing, as Allstate board chairman and Odell, vice president and secretary–insurance was being sold by direct mail, as well as in the catalogs.
This cozy Allstate leadership was soon rounded out with a president, Calvin Fentress Jr., who had married Wood’s daughter Frances the previous year. However, it was a case in which nepotism prevailed; Allstate Insurance Company was an immediate and long term success. Although it was spun off by Sears in 1993, revenue last year was in excess of $38 billion.
The mature Robert E. Wood.
In 1939 General Wood moved up to chairman of the board, a position he held until 1954. It was a pleasant life. He and his wife, the former Mary Butler Hardwick of Augusta, Georgia, lived in a 14-room white brick house in Lake Forest, where he spent his leisure time riding his Arabian horse, hunting, playing bridge and voraciously reading history and biography.
General Wood as the distinguished businessman he had become is portrayed in this marvelous oil painting in the Red Room of the Tortoise Supper Club, the popular Chicago restaurant owned by his great grandson Keene Addington.
Robert and Mary Wood’s children in addition to Frances, included Anne, who became the second wife of investment banker William H. Mitchell, founder of Mitchell Hutchins, Inc. (Mitchell’s first marriage was to Ginevra King, the Scott Fitzgerald muse who later left Mitchell to marry department store heir John T. Pirie.)
Another of Robert and Mary Wood’s daughters, Sarah, was first Mrs. James R. Addington and later Mrs. A. Watson Armour III. She was–until her death eight years ago, at 98–one of the Chicago area’s most formidable grande dames and a famously staunch supporter of Lyric Opera of Chicago, the Chicago Symphony Orchestra and Ravinia Music Festival.
The fully mature Robert Elkington Wood, who lived to be 90 years old . . .
And Robert Elkington Wood for the ages in the parade of eight bronze busts in the Merchant’s Hall of Fame lining the drive outside the Merchandise Mart.
Coming up: Megan McKinney’s Classic Chicago examination of the men who built Sears will continue with the life of Arthur MacDougall Wood.
Robert F. Carl