Sears, Once America’s Biggest Store, Collapses Into Bankruptcy

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Sears Holdings has filed for Chapter 11 bankruptcy and will close almost 150 stores by the end of the year, the iconic retailer announced Monday.

Sears had earlier announced the separate closing of 46 unprofitable stores, and said Monday that is expected to be completed next month.

Sears Holdings Corp, the 125-year-old retailer known for its Kenmore and DieHard brands, collapsed into bankruptcy under pressure from too much debt and too few shoppers.

Holdings will also close 142 unprofitable stores near the end of the year.

Sears, once the largest seller of home appliances in the US, trailed Lowe's, Home Depot and Best Buy in 2018 sales, according to an annual report published by TWICE.

Sears was built on two brilliant observations.

Like many Kmarts, the local store now carries a line of home appliances and bedding that traditionally was sold in Sears locations.

A spokeswoman for the mall's parent company, Washington Prime Group Inc., on Friday said the mall is in "active negotiations to transform" the space. Whirlpool added that 1 percent of its aggregate accounts receivable exposure was tied to Sears, and it had an "immaterial amount" of Sears-related inventory.

A large portion of the stores, according to the court filing made in NY, could also be purchased in a bankruptcy auction by a Florida hedged fund controlled by Lampert.

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In recent years, Sears struggled to compete with retailers such as Amazon and Walmart, along with increasing debts.

"We anticipated these changes and reorganized in light of them, but have yet to achieve the results that we desire".

The company filed for Chapter 11 protection from creditors with the U.S. Bankruptcy Court in White Plains, N.Y., and said Eddie Lampert is stepping down immediately as chief executive officer. A long series of store closings has left it with under 900 today.

Buckling under pressure, the bankruptcy announcement comes ahead of a $134 million (£102 million) debt repayment due at the start of this week. Once a symbol of the American lifestyle that prided itself on selling everything to everyone, it has been losing out to rival retailers Walmart and Amazon. While other traditional retailers enjoyed strong holiday sales, Sears and Kmart both reported sharp drops.

Edward S. Lampert, Sears Holdings' largest shareholder, has stepped down as CEO, but will remain chairman of the board.

At one Sears store liquidation sale a MONEY staffer visited recently, most clothes and shoes were 50% off regular prices.

The president lamented the status of the once prominent Sears, remembering the store's golden days, and he criticized its leadership for the situation.

With the bankruptcy, about 150 of the company's department stores could be closed, Reuters said late last week. Its shares shot up on Wednesday on the news that Sears was preparing for bankruptcy, even amid a sell-off in the broader market. The first Sears Roebuck catalog, which sold watches and jewelry, was printed in 1896. It doesn't expect any Sears-related impact to its current earnings guidance.

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