Sears Holdings, which owns Sears and Kmart chains, is expected to file for federal bankruptcy in NY early this morning, October 15.
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. Since a year ago alone, Sears has closed more than 380 of its 894 stores, down from 2,200 stores in the USA and Canada in 2005.
"I don't understand the point of Sears, I just buy everything online", said 23-year-old Lyft driver Shannon Dickey as we pull up to the abandoned storefront of Sears that sits at the top of Ross Park Mall, nine miles north of downtown Pittsburgh "I think their old catalogs are cool, but I just don't understand the point of Sears".
"The company believes that a successful reorganisation will save the company and the jobs of tens of thousands of store associates", Sears said in a statement.
Although some 142 Sears and Kmart stores will be closed as part of the bankruptcy, Sears and Kmart stores and the online and mobile platforms will continue to offer products and services to customers. A release from the company also says the current Chief Executive Officer will step down, effective immediately.
In recent weeks, Lampert has been pushing for a debt restructuring and offering to buy some of Sears' key assets, like Kenmore, through his hedge fund as a $134 million debt repayment came due on Monday. Only a handful of full Sears and Kmart stores remain in MI. Lampert will remain the company's chairman.
Chapter 11 bankruptcy protection postpones a United States company's obligations to its creditors, giving it time to reorganise its debts or sell parts of the business. The holding company has closed almost 3,000 Sears and K-Mart locations over the past decade and are now down to fewer than 1,000 retail locations.
An updated list of impacted stores is not yet available, though Whitehall Mall, home of the Lehigh Valley's last remaining Sears, isn't waiting around for an official announcement. The stock has lost about two-thirds of its already depressed value since Lampert announced the attempt to restructure the company's debt on September 24. Maybe this will let them turn things around, but it unfortunately looks more like a last stand before annihilation.
Under Lampert, the company saw a $1.5 billion profit in 2015, but it's been downhill ever since.
The Sears bankruptcy means that unsecured creditors, or suppliers and pensioners, will be last in line to get paid.
Fake Christmas trees and holiday lights could be the last items Sears ever sells.
Still, even given Lampert's mismanagement and Sears' drawn-on decline, Rosenblum distilled the company's downfall to one word: tragedy.
Once the dominant appliance retailer in the country, Sears accounted for only 3% of Whirlpool's sales worldwide in 2017.
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