Economy

Sears is hammering out deal to stay open in bankruptcy

Sears is hammering out deal to stay open in bankruptcy

Talks are continuing in advance of a $134 million debt payment that's coming due for Sears on Monday - a payment that Lampert has reportedly told associates he doesn't plan to make.

Sears Holdings Corp., the 125-year-old retailer that became an icon for generations of American shoppers, filed for bankruptcy early Monday, saddled with billions of dollars of debt racked up as it struggled to adjust to the rapid shift toward online consumption.

Sears started off in the 1880s as a mail order catalogue before taking United States malls by storms, seeing peak sales of the equivalent to 1 percent of USA gross national product. The icon once known for its pristine catalogs, and more recently known for decrepit showrooms and a controversial chief executive, saw its stock price plunge last week after reports that it had hired an advisory firm to prepare a bankruptcy filing ahead of the October 15 payment.

Sears Holdings, which owns Sears and Kmart chains, is expected to file for federal bankruptcy in NY early this morning, October 15.

Eddie Lampert, the company's chairman and largest shareholder who engineered the merger of Sears and Kmart in 2005, gave up the title of CEO as part of the filing. He's also one of the company's largest investors so he'll be a debtor and creditor during the bankruptcy proceedings.

"The intention is to bring the company out on the other side", a person familiar with the negotiationstold The Post on Friday.

Sears has been closing stores and selling properties as it grapples with a debt load of more than $5bn.

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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. The company once dominated the American landscape, but whether a smaller Sears can be viable remains in question.

Sears said 142 stores would close in the next three months. In its heyday, it was both the Walmart and Amazon of its time.

The company, which also operates Kmart retailers, also announced that they will be closing 142 stores nationwide in order to continue streamlining their "operations model". The company began opening retail locations in 1925 and expanded swiftly in suburban malls from the 1950s to 1970s.

The critical holiday season will be a particular challenge for Sears. It has sold off the legendary Craftsman brand and is considering an offer from Lampert for the Kenmore appliance name. Its stores became an albatross. He done so through deals and infusions from his hedge fund, ESL Investments Inc., which is the retailer's biggest equity holder and a major debt holder.

Plus, that many closures will put a lot of people out of work.

With a history that stretches back to 1886, the company was a pioneer of departmental stores that sold all things to all people and by the mid-twentieth century had built a vast empire that stretched across North America. We were treated decently, paid on time, and got reasonable discounts on good merchandise.