Sears Holdings Corp, the venerable US chain that once dominated the retail sector, but had been in decline since the advent of the Amazon.com Inc era, yesterday filed for bankruptcy and announced it was closing almost 150 stores.
With a history that stretches back to 1886, the company was a pioneer of departmental stores that catered to everyone and by the mid-20th century had built a vast empire that stretched across North America.
However, it has closed hundreds of outlets in the past few years amid a retail shakeout caused in part by the rise of Amazon and other e-commerce players.
Photo: Reuters
“The company and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York,” Sears said in a statement.
Sears had been drowning in debt and reportedly could not afford a US$134 million repayment that had been due yesterday.
Sears chairman Edward Lampert said the insolvency filing would give the company the “flexibility to strengthen its balance sheet” and enable it to accelerate a strategic transformation.
The company said it intended to reorganize around a smaller store platform, a strategy it said would help save tens of thousands of jobs.
However, it announced it would close 142 unprofitable stores near the end of the year, in addition to the previously announced closure of 46 stores by next month.
While retaining his chairmanship, Lampert is to step down as chief executive officer, with the role to be handled by other senior executives as part of a new “Office of the CEO.”
Sears added it had received commitments for US$300 million in debtor-in-possession financing and was negotiating for an additional US$300 million.
Sears is far from the only brick-and-mortar outlet to fall by the wayside as more consumers do the bulk of their shopping online.
In March, iconic Toys “R” Us Inc announced it was shuttering all of its US outlets, while other big names, such as Macy’s Inc and JC Penney Co, have also been forced to close numerous locations and lay off workers.
US shopping malls in turn have been forced to turn to a new generation of stores, food and entertainment, including players that began online, as well as gyms and video game bars like Dave & Buster’s Inc.
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