Sears CEO steps in for bankruptcy financing

One of Sears' major shareholders just dumped a chunk of his stock for pennies on his original investment

One of Sears' major shareholders just dumped a chunk of his stock for pennies on his original investment

The closings are in addition to 46 locations the once-mighty retailer already planned to shutter, though it did not specify how numerous new closures would be Sears or Kmart stores, according to the Chicago Tribune.

Mr Lampert, the largest shareholder, had pledged to restore Sears to its glory days by loaning out his own money to prop up the company.

If Sears ends up collapsing, the obituaries will blame Internet competition for undermining the big-box department store model. Lampert, who himself is Sears' biggest creditor, may also provide additional funds through his ESL hedge fund although that will require legal approval.

Sears, the one-time titan of American retail, filed for bankruptcy ahead of a $134 million debt payment due Monday and announced that it will close 142 stores.

Neil Saunders, managing director of GlobalData Retail, said Sears' troubles stretched back to the 1980s when it became "too diversified and lost the deftness that had once made it the world's largest and most innovative retailer".

In this photo, taken July 8, 2017, people walk into a Sears store slated for closing that is next to a mall that is being torn down in Overland Park, Kansas. 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. In the last two years alone, the company has closed more than 725 Sears and Kmart stores.

The company already has commitments for US$300 million of debtor-in-possession financing from its senior secured asset-based revolving lenders, according to the statement, and it's negotiating a US$300 million subordinated DIP financing with Lampert's hedge fund, ESL Investments Inc. The company will now be run by three of the company's top executives.

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 was just such an integral part of their childhood, building that American family". Lampert partially spun off the company from its parent in 2012 and was Sears Canada's biggest shareholder.

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Formed in 1886 by railroad station agent Richard Sears, the company started as a watch business in North Redwood, Minnesota.

Sears, an anchor of retail life for generations of Americans, filed for bankruptcy on Monday and said it was closing nearly 150 stores, the latest marquee victim of the online era.

Analysts have speculated for years that Sears was a sinking ship. The Craftsman brand of lawn equipment and tools has been sold.

The redevelopment of a Sears site at Kings Plaza in Brooklyn, New York, which opened in August, cost Macerich Co $100 million, including the asset's purchase. While other traditional retailers enjoyed strong holiday sales, Sears and Kmart both reported sharp drops. Instead of dwindling through its last handful of stores in Alaska, Blockbuster could have become the DVDs-by-mail giant, and then the streaming giant, and then the content production giant that Netflix is today.

Investors, however, seem to think liquidation is a more likely outcome.

Walmart developed supply-chain and other efficiency innovations that allowed it to undercut Sears on price, selection and ubiquity.

There will be no immediate impact to merchandise pricing (stores are not now liquidating).

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