Please ensure Javascript is enabled for purposes of website accessibility
Sears Staves Off Liquidation, Stores to Remain Open
gvw_ap_news
By Associated Press
Published 6 years ago on
January 16, 2019

Share

NEW YORK — Sears will live on — at least for now.

“While there’s no doubt that a shrunken Sears will be more viable than the larger entity, which struggled to turn a profit, we remain extremely pessimistic about the chain’s future.” — Neil Saunders, managing director of GlobalData Retail
The company’s chairman and largest shareholder, Eddie Lampert, won a bankruptcy auction for Sears, averting liquidation of the iconic chain, according to a source familiar with the negotiations. The person agreed to speak on condition of anonymity because they were not authorized to discuss the negotiation publicly.
Lampert, who steered the company into Chapter 11 bankruptcy protection in October, is aiming to keep open roughly 400 stores and preserve tens of thousands of jobs.
But how long Sears can survive under the 56-year-old billionaire, who has tried and failed to turn around the company many times before, remains an open question. Cutthroat competitors like Amazon, Target and Walmart also pose challenges that the struggling retailer has so far been unable to overcome.
“While there’s no doubt that a shrunken Sears will be more viable than the larger entity, which struggled to turn a profit, we remain extremely pessimistic about the chain’s future,” said Neil Saunders, managing director of GlobalData Retail. “In our view, Sears exits this process with almost as many problems as it had when it entered bankruptcy protection. In essence, its hand has not changed, and the cards it holds are not winning ones.”

At Its Peak, 4,000 Stores

The operator of Sears and Kmart had 687 stores and 68,000 workers at the time of its bankruptcy filing. At its peak in 2012, its stores numbered 4,000.
Lampert, the only one to put out a bid for the whole company, had sweetened his offer to more than $5 billion over the last few days through an affiliate of his hedge fund ESL after his original bid had been rejected by the Sears board. That included assuming certain liabilities like covering bills to vendors of up to $166 million. Details of the final terms couldn’t be learned.
The plan is not a done deal and must be approved at a hearing on February 1 by a bankruptcy judge in White Plains, New York.
Lampert, who gave up the CEO title when the Sears filed for Chapter 11, has maintained there’s still potential for the company. But he has yet to spell out details on how he plans to turn it around.
Lampert combined Sears with Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. He pledged to return Sears to greatness, but that never happened.

Lampert Owns 31% Sears’ Shares

The company, hammered during the recession and outmatched in its aftermath by shifting consumer trends and strong rivals, hasn’t had a profitable year since 2010 and has suffered 11 straight years of annual sales declines. Lampert has been criticized for not investing in the stores, which remain shabby.

Under Lampert, Sears has survived by spinning off stores and selling brands that had grown synonymous with the company, like Craftsman.
Under Lampert, Sears has survived by spinning off stores and selling brands that had grown synonymous with the company, like Craftsman. Lampert has loaned out his own money and cobbled together deals to keep the company afloat, though critics said he has done so with the aim of benefiting his hedge fund. ESL has maintained that the moves put much-needed cash into the business.
Four years ago the company created a real estate investment trust to extract revenue from the enormous number of properties owned by Sears. It sold and leased back more than 200 properties to the REIT, in which Lampert is a significant stakeholder.
Lampert personally owns 31 percent of the Sears’ outstanding shares and his hedge fund has an 18.5 percent stake, according to FactSet.
Lampert stands to realize a big tax gain keeping Sears alive, using the company’s years of net operating losses to offset future taxable income if one of his other companies takes over the chain, says David Tawil, president and co-founder of Maglan Capital, which follows distressed companies.

Lampert Will Need to Dramatically Reinvent Sears

Tawil and others believe Lampert wants to be in full control of liquidating Sears’ assets, including real estate.
If Lampert’s bid to save Sears gets final approval, he will need to dramatically reinvent the business. That means revitalizing aging stores and focusing on major appliance and tools that once were the jewels of the company, say industry analysts. Walmart, Target and others have been heavily investing in their own stores and expanding online, in large part because they have the capital to keep spending.
Sears will also need to convince shoppers like Sanjay Singh why they should keep coming back.
Singh was recently shopping with his wife at the Newport Centre Mall in Jersey City, N.J., and stopped by a Sears to look for a swimsuit for his 11-year-old daughter. He says he usually shops at other department stores.
“Sears is usually my last option,” he said.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Muslim NY Mayoral Candidate Reports Threats, Jewish Ohio Lawmaker Threatened Separately

DON'T MISS

It’s Final. No Live Horse Racing at Big Fresno Fair in 2025

DON'T MISS

Clover Is Eager to Bring You Good Luck and Great Joy

DON'T MISS

Fresno Police Seek Help Identifying 7-Eleven Robbery Suspects

DON'T MISS

Fresno Council Scraps Cannabis Advisory Group, Extends Advance Peace Funding

DON'T MISS

Buss Family to Sell Lakers at $10 Billion Valuation, ESPN Says

DON'T MISS

Massive Security Breach: 16 Billion Passwords Leaked From Apple, Google, Facebook Accounts

DON'T MISS

‘I’m an American, Bro!’: Latinos Report Raids in Which US Citizenship Is Questioned

DON'T MISS

Florida Congresswoman to Revive Bipartisan Immigration Bill. Valley Leaders Join the Push

DON'T MISS

LA Dodgers Say They Denied ICE Agents Access to Stadium Parking Lot

UP NEXT

Hunger Strike Begins as California Prisons Hand Down Biggest Restrictions Since COVID

UP NEXT

Musk Shares Negative Drug Test Results, Challenges Media Outlets

UP NEXT

Hurricane Erick Threatens Mexico’s Pacific Coast, Rapid Strengthening Expected

UP NEXT

More US Officials Face Threats as Fears Grow Over Political Violence

UP NEXT

Protester Killed at Utah ‘No Kings’ Rally Was Fashion Designer From ‘Project Runway’

UP NEXT

‘We Will Kill You Dead’: Florida Sheriff’s Stark Warning to Demonstrators

UP NEXT

Here’s What to Expect at the Army’s 250th Anniversary Parade on Trump’s Birthday

UP NEXT

US House Passes Trump Cuts of $9.4 Billion for Foreign Aid, Broadcasting

UP NEXT

Tulare County Inmate Found Unresponsive in Cell, Autopsy Pending

UP NEXT

Harvey Weinstein Convicted of Sex Crime Amid Contentious Jury Deliberations

Fresno Police Seek Help Identifying 7-Eleven Robbery Suspects

11 hours ago

Fresno Council Scraps Cannabis Advisory Group, Extends Advance Peace Funding

12 hours ago

Buss Family to Sell Lakers at $10 Billion Valuation, ESPN Says

12 hours ago

Massive Security Breach: 16 Billion Passwords Leaked From Apple, Google, Facebook Accounts

12 hours ago

‘I’m an American, Bro!’: Latinos Report Raids in Which US Citizenship Is Questioned

12 hours ago

Florida Congresswoman to Revive Bipartisan Immigration Bill. Valley Leaders Join the Push

13 hours ago

LA Dodgers Say They Denied ICE Agents Access to Stadium Parking Lot

13 hours ago

Netanyahu Says Fall of Iran’s Leadership Not a Goal but Could Be a Result

13 hours ago

Hunger Strike Begins as California Prisons Hand Down Biggest Restrictions Since COVID

14 hours ago

Sen. Alex Padilla: This Is How an Administration Acts When It’s Afraid

14 hours ago

Muslim NY Mayoral Candidate Reports Threats, Jewish Ohio Lawmaker Threatened Separately

WASHINGTON – The New York City Police Department said on Thursday its hate crime unit was probing anti-Muslim threats against mayoral ...

10 hours ago

Assemblyman Zohran Mamdani talks to people after the New York City Democratic Mayoral Primary Debate at the John Jay College of Criminal Justice in the Gerald W. Lynch Theater in New York City., U.S., June 12, 2025. (Reuters File)
10 hours ago

Muslim NY Mayoral Candidate Reports Threats, Jewish Ohio Lawmaker Threatened Separately

10 hours ago

It’s Final. No Live Horse Racing at Big Fresno Fair in 2025

11 hours ago

Clover Is Eager to Bring You Good Luck and Great Joy

Fresno police are seeking the public’s help to identify two suspects involved in a May 31, 2025, robbery at a 7-Eleven on East McKinley Avenue. (Fresno PD)
11 hours ago

Fresno Police Seek Help Identifying 7-Eleven Robbery Suspects

12 hours ago

Fresno Council Scraps Cannabis Advisory Group, Extends Advance Peace Funding

12 hours ago

Buss Family to Sell Lakers at $10 Billion Valuation, ESPN Says

12 hours ago

Massive Security Breach: 16 Billion Passwords Leaked From Apple, Google, Facebook Accounts

12 hours ago

‘I’m an American, Bro!’: Latinos Report Raids in Which US Citizenship Is Questioned

Help continue the work that gets you the news that matters most.

Search

Send this to a friend