Sears Files Chapter 11 Bankruptcy, Shuts Down 142 Stores

Sears Files Chapter 11 Bankruptcy, Shuts Down 142 Stores

Sears Files Chapter 11 Bankruptcy, Shuts Down 142 Stores

Sears Holdings Corp filed for Chapter 11 bankruptcy on Monday, a process that provides relief to indebted companies by allowing restructure of debts. Massive liquidation sales will start at the stores soon, the company said.

Sears already had closed Baltimore area department stores in Hunt Valley Towne Center, Eastpoint Mall and Hagerstown, and had closed Kmart stores in Dundalk, Elkton, Crofton and Salisbury.

Sears announced it will be conducting closing sales at a number of stores near the end of the year - in time for holiday shopping.

The appliance maker said Sears accounted for only 2 percent of its global net sales as of September 30.

A spokeswoman for the mall's parent company, Washington Prime Group Inc., on Friday said the mall is in "active negotiations to transform" the space.

Sears' stock has fallen from about $6 over the past year to below the minimum $1 level that Nasdaq stocks are required to trade in order to remain on the stock index. According to Sears Holdings, there are plans to close the Prince Frederick Kmart.

Lampert's efforts to keep Sears out of bankruptcy have included shedding hundreds of unprofitable stores. Decades earlier, it had been dethroned by Walmart Inc.as the biggest.

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Mr. Lampert said his hedge fund will continue to press for Sears to emerge from bankruptcy in a stronger position.

The company listed $6.9 billion in assets and $11.3 billion in liabilities in documents filed in the US Bankruptcy Court in the Southern District of NY. Its management tried to compete by closing stores and cutting costs.

The stores will close toward the end of the calendar year, Sears said. Edward S. Lampert, the company's largest shareholder, has stepped down as CEO but will remain chairman of the board. Even in bankruptcy, Mr. Lampert will have great sway over the company's fate. "Like many other brick and mortar retailers, Sears has encountered very substantial obstacles to profitability as a result of the enormous changes to the retail environment caused by the ever-increasing trend to online shopping".

Some stores have pulled out of bankruptcy court and found some stability, but the future of other longstanding retail institutions like Toys R Us are more doubtful.

Sears had been drowning in debt and reportedly could not afford a $134 million repayment that had been due on Monday. If any of them stumble when this market share is being all but donated to them, that might suggest they'll also have a tough time stealing Kmart's home goods sales or Sears's apparel sales. The first Sears Roebuck catalog, which sold watches and jewelry, was printed in 1896.

John Germann, 46, works full-time and makes $14 per hour as the lead worker unloading merchandise from trucks at the Chicago Ridge, Illinois, store, which has been drastically reducing its staff since he started nine years ago.

There is a Sears Hometown store in Atchison, Kansas.

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