The closings are in addition to 46 locations the once-mighty retailer already planned to shutter, though it did not specify how numerous new closures would be Sears or Kmart stores, according to the Chicago Tribune. While Sears and Kmart stores and the online business will remain open, the company will shut 142 unprofitable outlets near the end of the year, on top of 46 unprofitable stores already slated for closure by November.
Sears store is pictured with a sign indicating the store remains open during the ongoing redevelopment of the neighboring Granite Run Mall in Media, Pennsylvania, U.S., October 10, 2018.
Edward Lampert, the hedge fund manager who has been CEO of Sears Holdings since 2013, is stepping down from that role immediately.
Sears Holdings Corp filed for Chapter 11 bankruptcy on Monday with a plan to close 142 more stores, throwing into doubt the future of the century-old retailer that once dominated US malls but has withered in the age of internet shopping.
Sears joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate.
The company has announced so many different store closures and liquidation sales in 2018 that it's been hard to keep an official Sears store closing list. It involved selling Sears's real estate to help pay down borrowings. (This is in addition to the previously announced closure of 46 unprofitable stores by November 2018.) Sears, which has shuttered thousands of locations during the past several years, now operates a total of about 700 Sears and Kmart stores.
Along the way, the company found related innovations; for example, Allstate Insurance arose in the 1930s from the realization that Sears catalogs and stores would be good channels to sell insurance to the new legions of auto owners. Its holding company filed for bankruptcy today just as a massive payment on its debt was due.
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Lampert and his hedge fund ESL Investments Inc own just shy of 50% of Sears' shares and are its biggest creditor, with about $2.5 billion owed to the executive and funds he controls. Lampert also became Land's End Inc's biggest shareholder when the clothing manufacturer was spun out of Sears in 2014. Sears merged with Kmart in 2005.
"ESL believes that supervision by a judge will enable creditors to address any issue among them according to a clear set of rules and permit the sale of certain assets through a court-approved auction process to maximize value", the fund said in a statement.
Sears now accounts for less than 1.0 percent of many REITs' base rental income.
But in recent decades the company struggled in a quickly shifting retail environment, battered by competition from big-box stores and then by the meteoric rise of Amazon and other e-commerce players.
Sears was built on two brilliant observations. Whereas with weekly sales and even events like Black Friday, shoppers have to sift through full-price merchandise to find the deals, Sears liquidation sales feature across-the-board discounts on all items - and even the store fixtures are on sale.
Getting out of these ancillary businesses was supposed to allow Sears' executive team to focus on luring people to Sears stores to buy consumer goods again - but they had limited success.