Report: Sears to declare bankruptcy next week

Iconic retail giant Sears and affiliate Kmart expected to declare bankruptcy Monday.

David Rosenberg,

Sears
Sears
iStock

The iconic retail giant Sears may be facing a new wave of store closures amid reports the parent company, Sears Holdings, will be forced to declare bankruptcy next week.

According to a report by Dow Jones Newswires, Sears Holdings, which owns retailer chains Sears and Kmart, is expected to file for bankruptcy next Monday when a $134 million loan payment becomes due.

While the company has attempted to negotiate emergency funding to cover the loan payment and avert bankruptcy, as of Thursday evening no deal had been reached with creditors.

Lenders to the troubled retailer, including Bank of America, Citigroup, and Wells Fargo, are reportedly pushing Sears to file for bankruptcy. According to the Dow Jones Newswires, lenders have urged Sears Holdings to file for Chapter 7 bankruptcy, giving creditors access to all of Sears’ assets to cover the company’s debt.

Sears Holdings CEO Edward Lampert is hoping to avoid total liquidation of the 125-year-old department store’s assets, Reuters reported, with a plan by Lampert to personally buy out Sears’ Kenmore appliance brand. Such a purchase would provide a much-needed cash infusion of as much as $480 million.

Last year, Sears Holdings shuttered dozens of stores across the country for both the Sears and Kmart chains. In 2018 further closures were announced, leaving less than 900 locations for Sears and Kmart combined. Eight years ago, Sears alone operated some 3,500 stores across the US.

Sears Holdings now employs some 89,000 people in the US, just over a third of the 246,000 employees it had in 2013.


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