Sears craters after filing for bankruptcy

Galtero Lara
Octubre 15, 2018

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. Eddie Lampert has stepped down from his role as chief executive and will remain chairman of the board.

Sears, once the largest retailer in the United States, hopes to sell stores and other assets, including its Kenmore appliances brand and home services business, in court-supervised auctions while under bankruptcy protection, sources have previously said. It is unclear how the closures would impact Sears' nearly 70,000 employees. It started out as a vast mail-order business selling clothes, tools, toys and even tombstones, and became the biggest retailer in the United States before being overtaken by Walmart and later Amazon. Sears shares have traded under $1 for all of October ー a jarring price for a stock that hit an all-time high near $120 in April 2007, just before its fortunes began to turn.

But despite efforts to revive it, the company has not turned a profit since 2011.

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The most recent filing from Sears showed it had only $193 million in cash on hand as of August 4, the end of its last fiscal quarter. That might be true in part, but Sears has done much to hasten its own demise. The original Kmart store in Garden City closed previous year. Since previous year alone, Sears has closed more than 380 of its 894 stores, down from 2,200 stores in the US and Canada in 2005. Sears and Kmart had some 3,500 locations when they merged under Lampert in 2005; now there are about 900 nationwide.

The bankruptcy, which Sears said would help it to restructure its business, comes after years of decline.

For decades, Sears was king of the American shopping landscape. Sears, Roebuck and Co.'s iconic catalog featured items from bicycles to sewing machines to houses, and could generate excitement throughout a household when it arrived. It has been run over that period by the hedge fund manager Eddie Lampert, who sold off numerous firm's brands and properties but failed to win customers back, many of whom now prefer to shop online.

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