Sears has been having difficulty in general lately. However, I think the posts about the mediocre quality hit it on the mark.
I had a coworker that went with his family to a Sears studio a few years ago. He was quite annoyed that they used a "typical" (consumer grade) digital camera and Photoshop. I believe his comment was something along the lines of "I could do this myself."
He wasn't against digital, but had expected something a bit more professional for the money he was paying.
As a kid we had gone to Kmart a few times for family photographs, but these were special events - not permanent fixtures. Other than that, our church seemed to bring in a photographer yearly. Those pictures we always good.