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Customers that had business expenses, no taxes. Good morning. I'm Jane Pauley and this is Sunday morning with just nine days to go until Christmas holiday shopping is at its peak. Yet in the midst of all the frenzy, a former giant of American retailing is languishing. So what's in store for what was once one of our most popular places to shop?

David Pogue will report our cover story. Since 1893 Sears has been part of American life. There was the Sears catalog, the Sears stores, the Sears tower. But now the company is bankrupt and struggling to live through the holidays. It's just a message to all businesses in America.

You know you have to change. The 125 year rise and fall of an American icon ahead this Sunday morning. By contrast, the stores known as pop-ups are both surviving and thriving. With Luke Burbank, we'll pop into a few. Blink and you might miss them. Temporary events that combine art, commerce, and culture.

We just want to come into a city, conquer a city, and leave. The magical world of pop-ups later on Sunday morning. Roxana Saberi takes us to the land of Legos. Steve Hartman salutes a secret Santa. And more, all coming up when our Sunday morning podcast continues. Exactly 40 years ago, in millions of homes, maybe yours, entire families were eagerly looking through this holiday catalog from Sears.

So what happened? And what's in store for the store that used to set the pace for American retailing? Our cover story is reported by David Pogue. At its peak, Sears Roebuck was the biggest retailer in the world. Its headquarters was the tallest building in the world. One of America's great merchant companies is Sears Roebuck. It was the biggest employer in America, and was even America's biggest publisher, thanks to its famous catalog. But then, Sears has officially filed for bankruptcy.

The company has struggled for years after it dominated the department store business for much of the 20th century. Today, many of the Sears stores you grew up with look like this. Did you ever know this as a Sears? Were you ever here?

Yeah, I was here. I used to shop in here. I used to shop in here. This Sears, at the Paramus Park Mall in New Jersey, is about to become a Stu Leonard's grocery store. Stu Leonard Jr. is the CEO. I've always looked at Sears as, you know, a great retailer. And now to see us taking over at Sears, I will sit there and say, boy, we have to keep changing to his retailers. Sears was founded 125 years ago by a railroad man named Richard Sears. With his partners, Alva Roebuck, and later Julius Rosenwald, he figured out that America's new railroads and the Postal Service's package delivery would let them deliver products to small towns all over the country. Sears sold everything you'd ever need, from cradle to grave.

Everything for the house, including the whole house. No greater anti-communist propaganda could be disseminated in Russia or elsewhere than a few thousand of the 40 million copies of Sears catalogs put out each year. They took elite artifacts that only wealthy people had, made them accessible to people who were rising up through this new thing called the middle class. Don Katz is the author of The Big Store, an inside look at Sears written in 1986. He says Sears didn't invent the future only once.

In 1925, the company's then Vice President Robert Wood launched Sears's second act, opening physical stores. He decided that the automobile was the key to what was going to happen to commerce in America. And he began to buy the crossroads outside of cities and towns all over the country.

Those crossroads eventually became the suburbs. And when Americans moved in, Sears was waiting. You make it sound like Sears was this incredibly innovative company at the beginning.

Completely innovative. They were inventing consistently. Sears people will tell you that the real satisfaction has come from building into a job a part of yourself. In its heyday, Sears offered job benefits like profit sharing and generous pensions.

No wonder so many employees stayed with the company for decades. This end table came from Sears and the two wing backs came from Sears. Bobby Jones worked at Sears for 35 years and filled his house with its products.

This is a Kenmore dishwasher, microwave oven. This table and chairs and the china cabinet came from Sears. The drapes came from Sears. From my very first memory as a child, the Sears catalog was there in our house. The majority of the clothes, shoes was ordered from Sears. My mother even ordered her fruitcake each Christmas from Sears.

But over the years, innovation slowed and things began to change. Sears became increasingly inwardly focused, as many businesses that become very successful and very large do, to their peril. Mark Cohen was once the CEO of Sears Canada.

Today he teaches retail studies at Columbia University. He says that Sears could have survived the competition from Walmart, Home Depot and even Amazon. What ultimately doomed Sears, he says, was bad leaders. Especially billionaire investor Edward Lampert, who bought Sears in 2004 and merged it with Kmart. Today Kmart went shopping and came home with Sears. Lampert has sold off Sears brands and real estate and closed hundreds of stores.

Of the 2,300 Sears locations eight years ago, only about 500 remain open today. Lampert has publicly defended his efforts to turn the company around. And in an email to Sears employees, he blamed the bankruptcy in part on today's quote, difficult retail environment.

After declining our repeated requests to interview Lampert, Sears yesterday provided a statement that reads in part, protecting the interests of Sears associates and all stakeholders has and will continue to be a priority for the management. Is it possible that Sears was already behind the times doomed to go out of business when Lampert came along and that he really wasn't the tipping point? Well, I believe in 2005 when Lampert took over, the company could have been resurrected. Amazon still was in a very nascent position. Sears still had a tremendous reputation, especially in brands like Kenmore Craftsman and Die Hard.

And so there was no reason to believe the company had to quote unquote fail. Many retirees at the Sears reunion in Atlanta can't understand why Sears couldn't turn its successful catalog business into a successful internet store. Get the orders in, get the merchandise out and get it out fast. Sears could have had control of that just like Amazon many years ago. They gave it away. They gave it away, that's right. Well, good point. After predicting the impact of the railroad and then the highway system, how could Sears miss the rise of the internet?

Well, it didn't. Connect Prodigy to your computer and get stock quotes almost as fast as a broker. Remember the early online service called Prodigy? It was a joint venture between Sears, IBM, and CBS.

Get sports scores faster than on TV, shop at home. 11 years before Jeff Bezos founded Amazon.com. It was just a little ahead of its time.

What happens when you lose your way is you don't even know what you have anymore. 20 years after writing his book about Sears, Don Katz left journalism to found the audiobook company Audible, which in 2008 was bought by Amazon. He says all companies, even his own, can learn from what happened to Sears. They needed to reinvent themselves in a really disruptive way.

It just didn't happen. The remaining Sears stores are still open for the holidays and they're not open for the holidays. And just last week, Edward Lampert's hedge fund offered to buy the company out of bankruptcy for 4.6 billion dollars, saying they believed in Sears's quote potential to evolve. But retail professor Mark Cohen isn't optimistic. The company has zero chance of success. I hate to say that because there's still quite a few people in the U.S. at least who look to Sears for their employment, but there's no chance for the future there, in my opinion.

You walk in, you hit the farmer's market, then you're going to hit the bakery right over there. And at that Stu Leonard's grocery store in New Jersey, the only bit of Sears that will remain is a lesson. It's just a message to all businesses in America. You know, you have to change. This is a good reminder for us. We have to change every day. So what is the future of retailing?

Luke Burbank thinks he may know. Tis the season to be shopping. But while everyone is bemoaning the death of malls and other brick and mortar retail, pop-ups have been, sorry, hopping up all over the place. These temporary events, think of them as the hermit crabs of unused retail space, serve all kinds of purposes, from selling products overtly to selling things in a more subtle way, like this recent pop-up that brought back New York's famed Carnegie Deli, which actually closed in 2016, all in the interest of promoting an Amazon Prime TV show. Because they're fun, immersive, and oh-so-Instagrammable, but somebody still has to pay for them, pop-ups often straddle the line between art and commerce, and nobody straddles that line quite like 29 rooms. We think of 29 rooms as our immersive world of culture and creativity, where 29 different artists bring to life spaces and experiences, so everything from dance to art to music to film.

It's the creation of Piera Gelardi, whose digital media company, Refinery29, covers culture from the perspective of young women. 29 rooms, which popped up in LA for just four days a week ago, featured various rooms curated by artists and celebrities, like Nicole Ritchie and Kesha, and social justice organizations, like the ACLU, and major brands like Pantene, Smirnoff, and morning-after pill Plan B, which paid for these phone booths where visitors could hear pre-recorded stories of emergency contraception. All of my family lives in Iowa, so if I were to explain this to them, I would tell them that this is an interactive, live, in-the-moment type exhibit where you can see, feel, touch, hear.

It's just sensory overload. For these brands, paying to be here, at least temporarily, is a good way to reach potential customers in real life, which is difficult to do in this era of online shopping. We wanted an opportunity to really connect people in a physical space and allow them to interact with artists, interact with different forms of creativity that they might not already have access with, and then interact with both our brand and our brand partners. Pop-ups have become big business, worth about 50 billion dollars in 2016.

So pop-ular, sorry again, that in fact the average length of commercial retail leases has shrunk from 20 years to just five years. Just ask John Goodman. We just want to come into a city, conquer a city, and leave. Make them warm.

Whether we come back or not, who knows. Goodman used to be the CEO of mall retailers like Mervins and Wet Seal, but these days he thinks the future of retail is in pop-ups, like the one he runs, Candytopia. Feel free to touch and interact with the candy displays.

A traveling fun house dedicated to all things sweet. I was in retail my whole life, so I know the mall, I know the area, I know experiential retail. I felt like we could be part of the reinvention of the mall, because it was getting stayed and tired. Goodman's business partner is Jackie Sorkin, celebrity candy artist.

And yes, there is such a thing. It's just hundreds of thousands of pieces of candy, thousands of hours of work. Who took us on a tour of Candytopia San Francisco. I was obsessed with Willy Wonka, I was a latchkey kid, so you know spent a lot of time watching the movie over and over and over again. And eventually I think the principles of the movie really spoke to me.

And for a limited time, visitors can experience those principles themselves, all for the low low price of $34 a ticket. There's the celebrity portrait gallery, made of candy. Next door to the room where candy confetti shoots out of, well just see for yourself. And of course, don't forget the gift shop. But the main attraction might be the giant pit of fake marshmallows.

A moment perfect for sharing on social media, which is kind of the point, says Sorkin. We've got all these incredible structures, or you want to take photos with the candy sculptures. It's really just a Instagrammer's dream really. Dreams that can also come true at San Francisco's Museum of Ice Cream, which technically speaking is not really a museum, but was so popular as a pop-up, it's now permanent and just the place to take that perfect picture with that special someone, yourself.

With a pop-up, it's your ability to get people there quickly, because it's saying, hey limited call to action, get here now while supplies last. So the idea that this beautiful room made of flowers, or this crazy room made of tape, may not be here forever, so come take your photo, get a really cool angle on it, and then go about your day. Tommy Haunton is one of the founders of the Museum of Selfies. We're standing in our famous bathroom. There's a bit of an optical illusion effect. Located, where else, in Hollywood.

And yes, it also started as a pop-up. When you walk into a real space, you're there. That's very special, because there are chemicals in our brains that react when we are in a space. Watching TV, you can still get a reaction from a character or a journey. Hold on there, Tommy. Let's not get carried away.

But he does have a point. There's no substitute for actually being there. Not online, not on your phone. Actually being there with someone you love. The hot drink vending machine. These days you'll find it everywhere. And now a page from our Sunday morning almanac. December 16, 1884. 134 years ago today. The day William Henry Fruin of Minneapolis patented his automatic liquid drawing device. Designed for some reason to look like a building, Fruin's device dispensed mineral water upon the deposit of a coin. Making it America's first patented vending machine.

The first, but hardly the last. Over the decades, of course, vending machines of ever-increasing complexity and variety have become a familiar sight across our land. So familiar that a vending machine even figured into Stanley Kubrick's 1964 nuclear war comedy, Dr. Strangelove. In need of small change to make a pay phone call to the president, Peter Sellers implores Keenan Wynn to open fire. But if you don't get the President of the United States on that phone, you know what's going to happen to you? What? You're going to have to answer to the Coca-Cola company.

Most transactions go far more smoothly than that, of course. Today, vending machines dispense all sorts of products. Particularly in Japan, where the variety of foods and drinks and goods on offer is legendary.

With all due respect to that first machine, these days it's a lot more than mineral water. One of the most popular toys ever is about to get an earth-friendly makeover. Roxana Saberi takes us to the land where the magic is made. From the skies above Billin, Denmark, you can guess which famous toy company calls this town home. And inside this life-size Lego building, it's Lego heaven. Just about anything imaginable, reimagined in the tiny plastic bricks that have been inspiring tiny minds for decades. Is Lego your favorite toy? Yeah. Like more than video games?

Yeah. My second favorite toy is Lego second favorite toy is video games. Because even seven-year-old Max knows you can only do so much with an iPad. On the iPad, you can't really build something like the hand. That hands-on approach has been a hit since the brick was born in the 1950s. A whole new world to build. The unique system of interlocking bricks makes for endless possibilities. No wonder it was dubbed the toy of the 20th century for its universal appeal. Lego has come a long way from its humble beginnings in the 1930s, when Danish carpenter Ole Kirk Christiansen started making wooden toys in his Billin workshop. This was the earliest Lego toys. Made out of wood. Only made out of wood. They were called Lego from the Danish phrase, which means play well. Torben Skov has been designing Lego sets for more than 30 years. Does the toy live up to the name? I think it does.

It did at that time and it still does. These two parts of the mold would go together. He showed us the machine that made Lego's first plastic toys. The hot plastic will go into the mold.

So over here. And the prototypes for the bricks that would change everything. The company has since produced trillions of its now famous plastic bricks and they've changed so little that a piece made today still fits with one from 1958.

Which begs the question, why now is Lego remaking the very product that's clicked with kids for generations? So we're taking plastic pellets. The problem is the plastic. This is plastic that's made out of oil.

That's correct. This is what you want to change. This is what we're looking to find a better alternative for, for sure. To find that alternative, Lego appointed Tim Brooks as vice president for environmental responsibility and set a 2030 deadline to eliminate petroleum-based plastics to shrink its carbon footprint. And you can see it will break in a moment. Soren Christensen and his team at Lego's labs have been testing hundreds of plant-based and recycled materials in search of a suitable substitute. What is this material right here? This is one of the new materials I cannot tell you. Oh it's a secret.

This is a secret, yes. But it's one you're testing. This is one we're testing, yes. How sturdy is this? This is very sturdy. Is it sturdy enough for your new bricks? Yeah but there's a lot of other things we have to solve. He says the new bricks will have to look and feel just like the current ones.

No easy task. When you look at these they're shiny, they fit together, they're super safe, they have a sound, they're all the same color. So these are all properties that are quite hard to replicate in a new material. These are from a recycled material and they just don't fit together. Yeah they fall apart. They just fall apart too easily so we need to make those a bit tighter. Is it safe to say that the material you need to recreate these bricks in a more environmentally friendly way just does not exist?

It's a tough one for sure. There are sustainable materials that exist out there but the challenge is that quality and that safety. Tim Brooks says Lego has found one replacement so far for some of its softer pieces. This is just coming off fresh off the production line.

It's still a bit warm and you can feel it and there you go. It's plastic made from sugar cane but the new material works in less than two percent of Lego's products and critics say even plant-based plastics can weigh heavily on the environment. There is some concern that using sugar cane to create plastic is also very resource intensive. It requires a lot of water, it might involve deforestation.

Actually on sugar cane we put additional checks in place to make sure that it's grown in the right way. It's a lower environmental footprint than making bricks from oil for sure. It doesn't come without challenges and I think we shouldn't always see that bio-based materials are a silver bullet. It's a step on the journey. Lego is taking other steps too. Running wind farms to offset energy used at its sites and factories and aiming for 100% renewable or recyclable packaging. This way Lego hopes kids can play well well into the future.

We say we want to inspire and develop the builders of tomorrow so that means making a planet for them in the future and we can't say that we made a product a great toy for them but somehow that damaged their planet when they get older. Doubters to the contrary Santa is real and very much alive. Our Steve Hartman found him handing out the gift of goodness on the streets of Phoenix.

Ma'am how are you doing today? You ready for Christmas? A lot of people ignore the homeless but folks rushing past Moses Elder may regret their haste because this week all people had to do was pay him some attention and he would pay them back in Benjamins. So there's $100 for you.

You can imagine the shock. $100 for you. Oh that's what Christmas is all about. Moses's mission was financed by Secret Santa. Merry Christmas to you sweetie. The same anonymous wealthy businessman who every year goes around the country handing out hundred dollar bills to random strangers.

But this holiday season in addition to his normal giving he came here to Phoenix. Morning. Good morning. And recruited this most unlikely homeless elf. I want to enlist you to help me. Can we do that?

Yes. So here's what we're going to do. He gave Moses about three thousand dollars with the instruction to give it away to whoever he saw fit.

I think this will be a joyful experience for him. You know it's a myth that you know the homeless just take. From my experience the people with the least give the most of what they have.

We saw that too. Hey come here for a minute. Danny McCoy put change in the cup even though he has seven kids and until this moment. There's $100 for you sir for showing your kind heart. Had no idea how he was going to buy Christmas presents. Eternally grateful for for what he did.

You got looking for a job? And that's the kind of relief Moses brought to so many here. You had that for me. Most of those he blessed were strangers who just happened by. God bless you.

But not all. We love you. Don't you ever forget that. He gave this guy from church $400. He gave this homeless mother of five $500. And remember people appreciate you with your caring given heart that you take care of your kids the way you do. Thank you.

Okay. Of course in the end Secret Santa also gave Moses some money to keep for himself. This here is a new beginning for me. But he says that reward pales to the joy he received from helping others. Today we changed a lot of people's lives but I believe my life was changed the most. God bless us both. He says even when you're homeless it feels so much better to give than receive.

Y'all don't know I'm happier than y'all. You know kindness is a bridge between all people. And so if you're ever down and you want to lift yourself up go do something kind for somebody. Maybe that'll help.

It'll make you feel like way more than a hundred bucks. There you go. Thank you. That's okay. That's okay.

Yes that's okay. Ebenezer Scrooge may not be around to say bah humbug to Christmas but Jim Gaffigan may be the next best thing. Christmas is cancelled.

Okay that got your attention. That's something my mom would say to me and my five siblings when we were misbehaving as children which was all the time. But I guess in December we were bad enough to cancel Jesus's birthday. Christmas is cancelled.

It was a hyperbolic statement from an exhausted loving mother of six. As a kid I knew it was only a threat but it was a horrifying thought to think of not getting a Christmas present. I remember wondering if it's the holidays why are mom and dad so stressed out? Now that I'm an adult I understand it all too well. The holidays are stressful but let's not just blame it on the holidays or our crazy families.

It's a combination of a lot of things. You barely recover from Thanksgiving and then bam it's Christmas and then bam it's New Year's Eve. The holidays also obviously coincide with the end of the calendar year which adds additional weird obligations and resolutions. Add in the unfortunate fact that the holidays are in cold icy December. December that's not ideal. Let's face it without Christmas and New Year's Eve December would just be another January. Now I'm not proposing we cancel Christmas although at times it seems like a decent idea. How about this? We move Christmas. You're a mean one Mr Grinch.

All right all right I can already hear some of you typing your outrage on Twitter and Facebook but please know I'm joking kind of. But consider this Christmas is when we celebrate the birth of Jesus. There are many theories on when Jesus was actually born.

That implies there's some flexibility. How about spring? You know December in the Middle East is very nice but for us wouldn't it be nicer to travel to grandmother's house and say May? How about summer? If we moved Christmas to July we could do a combo birthday celebration. Merry Christmas and happy 4th of July. It makes sense we all know Jesus was from America.

Okay maybe I went too far and if you have a problem with this and want to complain to CBS just remember my name is Mo Rocca. Yes Virginia there is a Santa Claus. You've heard the expression.

So just who is Virginia? Of all the letters to Santa it's this one about Santa that stands out. You probably know it.

Printed in the New York Sun in 1897. Dear editor I am eight years old. Some of my little friends say there is no Santa Claus. Papa says if you see it in the sun it's so.

Please tell me the truth. Is there a Santa Claus? Virginia O'Hanlon 115 West 95th Street. Yes Virginia there is a Santa Claus was the famous response from editor Francis P. Church.

He exists as certainly as love and generosity and devotion exist. 120 years later the Yes Virginia column is the most reprinted newspaper editorial in history. Inspiring books, music, even an animated Macy's TV special. The paper! Your letter! Santa!

Look! While the words have traveled far. There's the letter. Virginia O'Hanlon's handwritten note has never left her family.

So written in cursive. James Temple is her grandson. Her letter as I think about it brings back my childhood. And Brock Rogers is her great-grandson who keeps it in a scrapbook. As a parent of two young kids I want them to maintain their innocence for as long as possible. And the Yes Virginia story the letter the response that she got is a way to do that for them.

Yes Virginia there is a Santa Claus. O'Hanlon who loved sharing her story led a life of achievement. Ahead of her times a modern woman. She earned a master's degree and doctorate in education and for decades was a New York City school teacher and principal. To be a single parent to end up with a PhD very remarkable.

She died at age 81 in 1971. As for her childhood house in Manhattan it's now home to the Studio School where her legacy is celebrated for all to see and hear. Please tell me the truth is there a Santa Claus?

Yes Virginia there is a Santa Claus. The most real things in the world are those that neither children nor men can see. Janet Rotter is head of the school. What makes it so special is the idea of curiosity the idea of questioning which is really at the heart of education of humanity of who we are. Dear editor I'm eight years old. Brock Rogers says the letter is worth tens of thousands of dollars but it's not for sale.

Oh no no that's staying in the family there's no price tag on that. And in a time of viral videos and instant messages a little girl's query from many Christmases past has a permanent place in our world. It really is a story of hope and it's a story of bringing people together. There's something here for everybody Merry Christmas. I'm Jane Pauley.

Thank you for listening and please join us again next Sunday morning. This is Intelligence Matters with former acting director of the CIA Michael Morell. Bridge Colby is co-founder and principal of the Marathon Initiative a project focused on developing strategies to prepare the United States for an era of sustained great power competition. The United States put our mind to something we can usually figure it out. What people are saying and what we kind of know analytically and empirically is our strategic situation our military situation is not being matched up with what we're doing. Follow Intelligence Matters wherever you get your podcasts.