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

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

NEW YORK — Sears has filed for Chapter 11 bankruptcy protection, buckling under its massive debt load and staggering losses.

The bankruptcy filing is expected in NY early Monday, according to the sources.

With the bankruptcy, about 150 of the company's department stores could be closed, Reuters said late last week. The company has roughly $5.6 billion in outstanding debt and has dwindled down to about 820 Sears and Kmart stores, down from 2,000 five years ago.

According to the Wall Street Journal, Sears has hired M-III Partners, a boutique advisory firm specializing in seeing companies through bankruptcies and restructuring, The company is also talking to lenders about providing it with debtor-in-possession financing, CNBC reported. But it wasn't able to keep up with shifting consumer habits as online rivals siphoned off shoppers, and turnaround efforts were hobbled by mountains of debt.

But it has struggled to reinvent itself in the face of online competition from companies such as Inc, as well as other brick-and-mortar retailers, including Walmart Inc.

According to the release, the now-former CEO Edward Lampert will remain Chairman of the Board. A release from the company also says the current Chief Executive Officer will step down, effective immediately. It's unclear which stores will close.

Last year, Sears sold its famous Craftsman brand to Stanley Black & Decker Inc., following earlier moves to spin off pieces of its Sears Hometown and Outlet division and Lands' End. The companys board has created an Office of the CEO, which will be responsible for managing day-to-day operations during this process.

Lampert, who is also the company's largest shareholder and lender, is hoping the deal, combined with a programme of divestments, will give Sears a fighting chance to escape liquidation ahead of the key holiday shopping season, the sources said. In said in a statement Monday it had proposed as recently as September a strategic plan that would include selling assets, including those ESL was seeking to purchase.

But the retail landscape is littered with brands that tried to reorganize in the bankruptcy process and liquidated their businesses instead, such as RadioShack, Toys "R" Us and Sports Authority.

The Sears catalogUE eventually sold products ranging from hardware and automobiles to kits for building an entire house. Sears opened its first store in 1925 in Chicago, and the Sears Tower in that city, now known as the Willis Tower, was the world's tallest building when it opened in 1973.

Still, even given Lampert's mismanagement and Sears' drawn-on decline, Rosenblum distilled the company's downfall to one word: tragedy. The company has said it's the nation's largest provider of home services, with more than 11 million service calls a year.

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