American Retail Giant Sears Files for Bankruptcy
Sears, the American retail Goliath has filed for Chapter 11 bankruptcy protection, succumbing to massive debt pressure and astounding losses.
There was a time not so long back when Sears ruled the American retail landscape. But the big lingering question is whether the shriveled version of itself can be feasible or will it be forced to go out of business, concluding the last chapter for an iconic name that emerged more than a century ago.
Sears Holdings will also close 142 lossmaking stores close to the end of the year. Closing down sales at these stores are anticipated to begin shortly. This is in addition to the formerly broadcasted closure of 46 unprofitable stores that is expected to be accomplished by November 2018.
Given its sheer extent, Sears’ bankruptcy filing will trigger ripple effects on everything from already ailing property-owners to its spread-out workforce.
CEO Edward S. Lampert has stepped down effective immediately. He will continue as chairman of the board. The company’s board has formed an Office of the CEO, which will be accountable for managing day-to-day actions during this process.
In the past weeks, Lampert has been working towards debt restructuring and offering to buy some of Sears’ key properties like Kenmore through his hedge fund as a $134 million debt settlement comes due on Monday. 31 percent of the company’s shares are owned by Lampert personally and his hedge fund has an 18.5 percent stake, according to FactSet.
American Retail Giant Sears Files for Bankruptcy
Sears’ stock has tumbled from around $6 over the past year to under the minimum $1 level that Nasdaq stocks are required to trade in order to continue on the share index. In April 2007, shares were being actively traded at about $141. The company, which once had 350k workers, has had no other option but to shrink its workforce to fewer than 90k people as of earlier this year.
The company has accumulated $6.26 billion in losses, excluding one-time events, since its last yearly profit in 2010. In its last financial year, it achieved $16.7 billion in sales, down from its peak of $50 billion in 2008.
As of May, it had less than 900 stores, down from around 1,000 at the end of 2017 and down from its peak in 2012 at 4,000.
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Source: dallasnews.com, foxbusiness
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