Well, it has officially happened. Sears Holding Corporation, a company that has dominated the retail space for more than a century, has filed for bankruptcy protection.
Sears Holdings filed for bankruptcy protection early Monday after years of staying afloat through financial maneuvering and relying on billions of CEO Eddie Lampert’s own money. Lampert, who has served as CEO for the past five years, will step down from that post, effective immediately, but remain chairman.
The 125-year-old retailer, once the nation’s largest, said Monday it was appointing Mohsin Meghji, managing partner of M-III Partners, as its chief restructuring officer.
As part of the bankruptcy, Sears will shutter 142 stores toward the end of the year. It expects to begin liquidation sales shortly. The locations of these stores wasn’t immediately known.
The bankruptcy filing comes more than a decade after Lampert merged Sears and Kmart, hoping that forging together the two struggling discounters would create a more formidable competitor.
According to Bloomberg, the company has listed total assets of around $1 billion, while also listing total debt of about $10 billion. Sears and Kmart stores will remain open with the help from a $600 million loan but will shut down 142 unprofitable locations towards the end of the year.
As of this post, the company has yet to be de-listed from the New York Stock Exchange. It’s unclear whether the company will be able to adopt a strategy that will help secure its survival while making its creditors whole.
The bankruptcy of Sears is an additional headwind for Electrolux’s (ELUXF) North American segment, which accounts for 32% of group operating profit. The struggling department store accounts for 10% of divisional revenue and will likely impact Electrolux’s second-half 2018 and 2019 growth.
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