U.S. retailer Sears files for bankruptcy

Jeannie Matthews
October 16, 2018

Sears Hometown stores are a franchise. In April and August, ESL presented proposals to acquire certain Sears assets, followed by a broader September plan for real estate transactions and asset sales.

It ditched Lands End in 2014.

Sears Holdings sold one of its other exclusive brands, Craftsman, last year. The only acquirer it could find was Lampert, who offered $400 million for Kenmore through his hedge fund. "Sears never quite established a distinct identity there".

Sears was built on two brilliant observations.

Saunders of GlobalData Retail spared no criticism of Sears in his analyst note, listing failing after failing of the company. Sales have plunged 60% since then. The company has more than 700 stores across the country, including at the Chautauqua Mall in Lakewood.

The bankruptcy filing was sparked by a standoff between Lampert, the company's biggest shareholder and lender, and a special board committee, over a rescue plan proposed by Lampert. He has so far not disclosed whether he has turned a profit or loss since he invested in Sears following years of complex financial engineering at the company.

For all its years of decay, Sears still commands a hefty annual sales haul.

With Sears heading toward bankruptcy, any potential for liquidation could mean an end to the lease agreements with Seritage. But he warned that the company was running out of cash.

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Saunders said company leadership had failed to change with the times and that its future was very much in doubt.

The company said Monday it has secured $300 million in financing from banks to keep the operations going through bankruptcy.

Sears Holdings Corp. filed for bankruptcy early on Monday morning, the culmination of a years-long decline of the American retail institution, providing another example as to why hedge fund managers should steer clear of retail. If this strategy hasn't given J.C. Penney a jolt yet, I don't know why it would now, especially as a bunch of stronger retailers join the fray for Sears's scraps.

It's also worth noting that Sears and Montgomery Ward were both disruptors of marketplaces in their own times.

It should be remembered that Sears started as a catalog business and that it remained part of the company's structure right up until the commercial Internet launched. He soon partnered with watch repairman Alvah Roebuck.

Back between the two world wars, the Sears catalog sold kits for building houses. Many large suppliers are getting paid in advance, while some smaller ones have cut payment terms to a few weeks, instead of months, according to people familiar with the situation, who asked not to be named because the dealings are private.

In a March 2017 government filing, Sears said there was "substantial doubt" it would be able to keep its doors open - but insisted its turnaround efforts would mitigate that risk. People just don't care about Sears anymore. Today, refrigerators, washing machines and other appliances are sold under the name.

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