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Sears, once the largest retailer in the world, is now reportedly facing bankruptcy.
The company, which hasn’t turned a profit since 2010 and is $134 million in debt, recently approached several banks to prepare for bankruptcy filing, CNBC reported Wednesday.
Shares plunged almost 20 percent on the news, and are set to open at a record low.
Sears CEO Eddie Lampert has been pumping funds from his own hedge fund, ESL Investments, into the company for years in an attempt to keep it afloat. Lampert owns a controlling share in Sears, with 31 percent of its stock; his hedge fund owns another 19 percent.
In August, ESL made an offer to buy out Sears' well-known appliance brand Kenmore and the company's home improvement business. Cash from those sales would infuse the company with around half a billion dollars, which could stave off bankruptcy for a few more months. Sears sold off another legacy brand, Craftsman, in 2017.
Once a staple of Main Street and malls nationwide, the 125-year-old company has shut down over 100 stores in the last year, with 46 stores set to shutter next month alone. Sears and Kmart, part of Sears Holdings, operated around 1,000 stores in 2017.
Shares have fallen by more than 85 percent in the last year as e-commerce has taken over the brick-and-mortar retail space. Despite pairing up with Amazon in 2017 to sell appliances online, analysts say Sears has not kept pace with change nor made investments in the digital space to the extent that Walmart and Target have done.
Daniel_Bryan_Fan on October 10th, 2018 at 15:04 UTC »
Worked there for 8 years. Largest complaint was the store was old and run down but rather than update to a more modern look they just gave us iPads that worked 5% of the time and infuriated customers. We literally got in trouble for not using the iPads even though they did not work. We also got in trouble for matching the online prices that brought customers into the store to begin with. Customers always complained about our ridiculously long checkout process but rather than streamline we were always given more questions to ask and programs to try to get them to sign up for. We had an internal social network called pebble that the CEO (Eddy Lambert) used under a fake name and would argue with hourly employees about our ridiculous policies. Fast Eddy Lambert ran this American titan into the ground.
bearsick on October 10th, 2018 at 13:23 UTC »
I was just in a Sears over the weekend and couldn't believe they had stop selling TVs and video games. All that was available for sale in the store was some mattresses clothing and tools. I was thinking man this close to Christmas they really need to get some Electronics in. Then I thought about what store I was in.
fa53 on October 10th, 2018 at 13:13 UTC »
Glad I didn’t buy the extended warranty on my washer and dryer last month.