Sears Declares Bankruptcy; CEO Contributes Toward Financing Package
When Sears was selling everything, Amazon was selling only books.
Now Amazon is selling everything, and Sears is in the bankruptcy books. It's a game-changing moment in the retail industry, especially because Sears was once the biggest retailer in the United States.
But everybody knew this day was coming, at least since everybody got a smartphone. Sears CEO Eddie Lampert, maybe not so much.
The billionaire investor is trying to keep the department store chain alive, even as Sears Holding Corp filed for Chapter 11 with a plan to close 142 of its 700 stores by the end of the year. He has pledged $500 million to $600 million to finance the company during the bankruptcy proceedings.
Lampert, who acquired the company in 2005 for $11 billion, is the largest shareholder. He is stepping down as chief executive officer, but continues as chairman.
According to reports, Lampert wants to restore Sears to its glory days. However, it's not looking good for the company's 70,000 employees.
It's not the end of the world, but the retail apocalypse started a while ago. Thousands of mall-based stores have closed in the wake of online shopping, and it looks like the biggest one is about to go down.
Reuters reported that Lampert hopes to pull Sears out of liquidation before the key holiday season. Big banks, including Bank of America and Wells Fargo, are supposed to help out.
In the meantime, Sears plans to reorganize its debts following years of declining revenues. It proposes to sell more stores and other assets in court-supervised auctions.
Lampert may bid on properties, such as the Kenmore appliances brand. He could also finance his bids by forgiving some of the $2.5 billion Sears owes him.
In its filing, Sears listed $6.9 billion in assets and $11.3 billion in liabilities.
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