Once an icon of American retail, Sears Holdings (NSDQ: SHLD) is on the brink of bankruptcy.

The company added an expert on restructuring and bankruptcy to its board of directors. Also, the Wall Street Journal reports that the company has hired advisors to prepare to file for Chapter 11. Five years ago, the share price was still around $50, but it has steadily slid toward zero.

By the time you read this, it’s possible bankruptcy may have already occurred because Sears could take action ahead of $134 million of debt due this week.

Bankruptcy really isn’t surprising. After all, the retail chain has suffered losses in seven straight years, and sales have not grown since the financial crisis 10 years ago. Since May 2017 alone, the company has shut down more than 400 stores, or roughly 30% of its stores—never a good sign.

Just a few weeks ago, Sears CEO Eddie Lambert had released a debt-restructure plan to buy some time. But given Sears’ financially woeful performance, the lenders likely were impatient so bankruptcy looms.

Sear’s sad decline is a reminder that companies, no matter how dominant they seem, must continue to innovate and adapt to stay competitive.

Past Glory

Back in its heyday, Sears was a household name synonymous with mass consumerism. Everyone knew about the Sears Catalog, Sears Wish Book, and the Sears Tower. If you didn’t want to visit a Sears store, you could order from them by mail and the goods would be shipped right to you.

Sears was such a dominant force; it was basically the Amazon (NSDQ: AMZN) of yesteryear. And like Amazon, Sears was efficient, offered low prices, and expanded into other businesses to try to become an inextricable part of consumers’ lives.

Today, the Sears Catalog and Sears Wish Book no longer exist and Sears Tower isn’t even named Sears Tower anymore and belongs to someone else.

Not Enough Self Improvement

Sears looked for new ways to grow beyond retail. For example, in the 1980s, Sears tried to expand into financial services and bought Dean Witter and Coldwell, Banker & Co. Additionally, together with IBM (NYSE: IBM) it invested in an online portal called Prodigy, a pre-Internet private network. By 2000, it was seriously pushing sears.com as an online marketplace for its many product lines.

Unfortunately, as Sears looked outward, it didn’t do enough to improve its core retail business operations. The outside investments did not pan out and it was outmaneuvered by better-run retail competitors.

Twenty years ago, Sears’ most formidable rival was Walmart (NYSE: WMT) (Amazon was still finding its way). Walmart used better inventory and supply chain management to run its operations more efficiently and was able to offer lower prices and a wider selection of products, including groceries, and responded to changing consumer tastes more quickly.

Meanwhile, Sears simply didn’t make adjustments quickly enough and got left behind. By the end of the 1990s, Walmart had pushed Sears aside as top dog in retail and Sears has been running in quicksand since.

A Slow Death

In 2004, Sears merged with Kmart to create a major retail force with 3,500 stores. Lambert, then the major owner in Kmart, masterminded this deal. The idea was to cut costs and cross sell Sears and Kmart brands. The initial results were good. Sales rose in 2006, the first full year after the merger, but every year after that sales have gone downhill.

Lambert ran the combined Sears as if it were a bunch of separate divisions that had to compete with each other. Costs went up, and profits went down, eventually turning into losses.

And of course, the Amazon phenomenon happened. In 2006, Sears generated almost five times Amazon’s revenue. By 2011, Amazon had passed it and the gap is widening every year. In desperation, Sears has even partnered with Amazon on appliances, car batteries and tires, but the company had sunk too deep.

The lesson for investors: never stand still. The only constant in the business world is change.

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