Sears, One-Time Face of American Retail, Files for Bankruptcy

Ann Santiago
October 15, 2018

In a March 2017 government filing, Sears said there was "substantial doubt" that it would be able to keep its doors open - but insisted its turnaround efforts would mitigate that risk.

No. Sears says it will make every effort to ensure a timely delivery for your order.

Sears Holdings Corp CEO Eddie Lampert has stepped in to contribute towards a financing package of between US$500 million and US$600 million that the United States department store operator was close to securing on Sunday (Oct 14) to fund operations during bankruptcy proceedings, people familiar with the matter said. The stock had trimmed its losses, and was down about 12% at 8:24 a.m. ET.

Lampert is now Sears' largest shareholder, with about half the company's shares. The company later became Sears, Roebuck and Co and began selling everything from homes to hardware, becoming the largest retailer in the country until Walmart replaced it in 1990.

After topping out at more than $122 a share in 2007, Sears' stock has lost almost all of its value as it has struggled with shifts in consumer spending, and the rise of e-commerce, among other things. Sound familiar? And yet neither company could compete, either in catalog business or in the big-box retail model. But the onset of discounters like Walmart created challenges for Sears that have only grown.

But many of Sears' problems were self-inflicted.

It ditched Lands End in 2014.

One of the biggest prizes could be appliances, a category where Sears was still a major player and was on pace to generate $3.5 billion in sales this year, according to UBS Securities.

Lampert's has been loaning out his own money for years and has put together deals to prop up the company, which in turn has benefited his own ESL hedge fund. Lampert personally owns 31 percent of the company's shares. The Sears board never accepted the offer.

Whirlpool, which had started in business more than a century ago selling its appliances at Sears, pulled its various brands out of Sears and Kmart stores previous year.

It's also worth noting that Sears and Montgomery Ward were both disruptors of marketplaces in their own times.

Sears dates back to the late 1880s and its mail-order catalogues with merchandise from toys, medicine and gramophones to automobiles, kit houses and tombstones made it the Inc of its time.

"This is a company that in the 1950s stood like a colossus over the American retail landscape", said Craig Johnson, of retail consultancy Customer Growth Partners. Lampert partially spun off the company from its parent in 2012 and was Sears Canada's biggest shareholder. Lampert bought Sears in 2004 and merged it with Kmart, in which he had a controlling stake, the next year. That was an enormous shift for people who lived on farms and in small towns and made numerous goods they needed on their own, including clothes and furniture.

Many Sears locations are within struggling shopping malls.

In July, Sears closed its last store in Chicago, once its hometown.

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