Sears files for bankruptcy - swan song for a U.S. icon
Oct 15 2018
Some like Payless ShoeSource have had success emerging from reorganisation in bankruptcy court but plenty of others have not, including Toys R Us and Bon-Ton Stores, both of which collapsed after a Chapter 11 filing.
Previously, Sears has secured cash by selling stores to Seritage Growth Properties, a real estate investment trust which the retailer formed in 2015 to convert Sears and Kmart stores into different properties, such as offices, high-end retail and residential complexes. Sears recently added a restructuring expert as a company director for an additional layer of guidance on how to navigate a bankruptcy filing.
In July Sears closed its last store in Chicago, once its hometown.
According to the release, the now-former CEO Edward Lampert will remain Chairman of the Board. It has been run over that period by the hedge fund manager Eddie Lampert, who sold off numerous firm's brands and properties but failed to win customers back, many of whom now prefer to shop online. But it wasn't able to keep up with shifting consumer habits as online rivals including Amazon.com siphoned off shoppers, while turnaround efforts were hobbled by mountains of debt. The company has roughly $5.6 billion in outstanding debt and has dwindled down to about 820 Sears and Kmart stores, down from 2,000 five years ago.
"While we have made progress, the plan has yet to deliver the results we have desired". The arrangements are still subject to court approval.
The department-store chain once ranked as the biggest USA retailer, with a reputation built on its money-back guarantee of customer satisfaction.
But the onset of discounters like Walmart created challenges for Sears that have only grown and it faced even more competition from online sellers and appliance retailers like Lowe's and Home Depot.
Lampert tried multiple strategies to revive Sears since using the Kmart chain to acquire Sears in 2005, sometimes with his own money. It was not immediately clear where those stores are located or how many jobs would be affected.
She said a refrigerator her mother bought at Sears broke after two years and it still hasnt been fixed for nearly a month with no help from the retailer. Lampert partially spun off the company from its parent in 2012 and was Sears Canada's biggest shareholder.
The company's lenders are encouraging Sears to shut down and liquidate, the Wall Street Journalreported Thursday. He soon partnered with watch repairman Alvah Roebuck.
The Sears catalogUE eventually sold products ranging from hardware and automobiles to kits for building an entire house.
Negotiations over the fate of Sears Holdings Corp. have moved away from a possible liquidation toward a plan that would keep some stores open through Christmas, according to a person with knowledge of the matter.