The world changed and they didn't think it would effect them. Same as the big three automakers in the '70's... Just assume the people will keep buying their stuff just because they always have. Then slowly your market share starts to drop.
When I was a kid, grandpa would often take me to Sears on a Saturday just to walk around and see what's new. Later when I bought my house in 1996, lots of stuff came from Sears...washer, dryer, garage door opener, TVs, new toolboxes and more tools, air compressor for garage, etc.
Last year my washer broke and I did a little internet research first, then went to sears to look around. I couldn't believe how poor the customer service had become. Neither person could or would answer my questions, just wanted to talk about payment options and extended warrante.