Sears, once a retail titan, files for Chapter 11 bankruptcy

Lloyd Doyle
October 15, 2018

"The Company and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of NY", a statement by Sears Holdings Corporation said.

The plans, which remained in flux on Friday afternoon, would leave the fate of Sears' remaining roughly 250 stores uncertain, the sources said.

Sears, the venerable U.S. chain that once dominated the retail sector but had been in decline since the advent of the Amazon era, filed for bankruptcy on Monday, October 15, and announced it was closing nearly 150 stores.

The filing, ahead of the crucial Christmas shopping season, comes after rescue efforts engineered by chief executive and chairman Eddie Lampert have kept it outside the bankruptcy court - until now.

Reports circulated that the company is talking to advisers and banks in preparation for a bankruptcy filing.

The most recent filing from Sears showed it had only $193 million in cash on hand as of August 4, the end of its last fiscal quarter. A long series of store closings has left it with under 900 today.

Sears dates back to the late 1880s and its mail-order catalogues with merchandise from toys, medicine and gramophones to automobiles, kit houses and tombstones made it the Amazon.com Inc of its time.


Sears has been closing stores and selling properties as it grapples with a debt load of more than $5bn. The company shuttered more than 2,600 stores over the past 13 years.

The company said it has arranged $300 million in debtor-in-possession financing, which will allow it to continue operating the business and paying employees while it tries to restructure around a smaller group of stores. In 2004, the company was acquired by hedge fund manager Edward Lampert and merged with K-Mart.

In an earlier attempt to avoid bankruptcy, Sears past year sold its Craftsman tool brand to power tool maker Stanley Black & Decker for $900 million.

The company was started by Richard Sears, a train station agent in Minnesota who began selling watches by mail in 1886, according to the company's website. That was an enormous shift for people who lived on farms and in small towns and made numerous goods they needed on their own, including clothes and furniture. Its Craftsman tools and their lifetime guarantees were a mainstay of middle-class America. But it struggled to get more people through the doors or to shop online. Big box rival Home Depot took its place.

The bleak figures are an outlier to chains like Walmart, Target, Best Buy and Macy's, which have been enjoying stronger sales as they benefit from a robust economy and efforts to make the shopping experience more inviting by investing heavily on remodeling and de-cluttering their stores.

As of May, it had fewer than 900 stores, down from about 1,000 at the end of a year ago. That's down from 317,000 United States employees in early 2006, soon after the merger.

Other reports by Iphone Fresh

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