Sears, the Amazon of its day, files for bankruptcy

Lloyd Doyle
October 15, 2018

Sears Holdings Corp filed for Chapter 11 bankruptcy on Monday, a process that provides relief to indebted companies by allowing restructure of debts. Eddie Lampert has stepped down from his role as chief executive and will remain chairman of the board.

Sears, the 125-year-old USA department store chain that was once the biggest retailer in the world, has filed for bankruptcy after years of losses and mounting competition from online rivals such as Amazon. Sears had already announced the closure of 46 stores in November.

Such financial woes contrast with the promise that Lampert made when he combined Sears and Kmart in 2005, two years after he helped bring Kmart out of bankruptcy.

In September, Lampert - Sears' largest shareholder and creditor and the owner of the hedge-fund ESL Investments - asked creditors to refinance $1.1 billion in debt before the October 15 payment, according to a filing with the Securities and Exchange Commission. His hedge fund has an 18.5 percent stake, according to FactSet. Less clear are the fortunes of the 90,000 or so current Sears workers nationwide.

Sears' stock has fallen from about $6 over the past year to below the minimum $1 level that Nasdaq stocks are required to trade in order to remain on the stock index. In August, it closed 13 Kmart stores and 33 Sears locations, including the Oakland Mall and Jackson Crossing stores. Only a handful of full Sears and Kmart stores remain in MI.

As of May, it had fewer than 900 stores, down from about 1,000 at the end of past year. Sears opened its first store in 1925 in Chicago, and the Sears Tower in that city, now known as the Willis Tower, was the world's tallest building when it opened in 1973.

Analysts have speculated for years that Sears was a sinking ship.

The Sears workforce has dwindled to about 68,000 from 302,000 a decade ago. "Sears Roebuck when I was growing up was the big deal". He recently proposed selling off another $3.25 billion in real estate and assets, including Sears Home Services and the flagship Kenmore brand.

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