Major rival Walmart and Amazon went bankrupt in the US

The American retailer Sears Holdings Corp., the American retail market leader for many decades, failed to adapt to changes in the industry, and declared himself bankrupt.

On Monday, October 16, Sears Holdings went to court for protection from creditors in accordance with the US Bankruptcy Code Chapter 11 – New Time reports, citing Interfax-Ukraine. The corporation was to pay a debt of $ 134 million on that day. Sears’s total debt exceeds $ 10 billion, according to documents submitted to the court.

The Sears largest shareholder, who has a 125-year history, is the hedge-fund ESL Investments Founder Edward Lampert. He poured into the company for years its own funds to keep it afloat. While some banks and investors are talking about the Sears complete elimination possibility, Lampert hopes that the retailer will be able to avoid this fate by restructuring operations “around a smaller platform”.

“The Bankruptcy Code Chapter 11  will give Sear a space for maneuver to strengthen the balance sheet, which will allow the company to speed up the strategic transformation, optimize the operating model and return to a profitable level”, – Lampert stated.

Sears will receive about $ 300 million from lenders under the agreement, which will allow the company to save hundreds of stores. The agreement provides that the retailer will close 142 loss-making stores by this year end. In the near future the sale of its property will begin. The company has previously announced plans to close 46 stores by the next month end.

Currently, the chain operates about 700 Sears and Kmart stores, with about 70,000 employees. Lampert can provide the company with another $ 300 million from the ESL fund, if such a step is approved by the court. The hedge-fund is also considering buying the Sears stores “substantial share”. Lampert resigned as Sears Chief Executive Officer, but he remains Chairman of its Directors’ Board, – the company says in a press-release.

Reference. The company was once the largest US retailer. It was founded by Richard Sears and Alva Robak as Sears, Roebuck & Co. in 1893. The company began to deliver one of the first by mail the goods ordered by consumers in special catalogs.

However, Sears could not compete with companies such as Walmart and Costco, offering lower prices to customers, as well as online-retailers, including Amazon.

Source: New Time

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