Sears bankruptcy could make these 5 big companies multi-million-dollar losers

Daniel Fowler
October 15, 2018

Among the Sears assets that haven't already been pledged to lenders are its Kenmore brand, about 200 stores and its home improvement and services division.

Sears Holdings Corp (SHLD.O) CEO Eddie Lampert has stepped in to contribute towards a financing package of between $500 million (382 million pounds) and $600 million that the US department store operator was close to securing on Sunday to fund operations during bankruptcy proceedings, people familiar with the matter said.

Sears listed assets in the range of US$1 billion (RM4.16 billion) to US$10 billion and liabilities in the range of US$10 billion to US$50 billion, according to a court filing.

"This is a company that in the 1950s stood like a colossus over the American retail landscape", said Craig Johnson, president of Customer Growth Partners, a retail consultancy.

The company made a filing under the Chapter 11 of the United States Bankruptcy Code on Monday.

In recent weeks, Mr Lampert has been pushing for a debt restructuring and offering to buy some of Sears' key assets like Kenmore through his hedge fund as a 134 million U.S. dollar debt repayment falls due on Monday.

USA retailer Sears, a brand that once dominated shopping malls in the country, has filed for bankruptcy. However, according to Reuters, Lampert is considering a bid for some of the company's businesses and real estate once it files for bankruptcy.

For now, Sears will be run by an Office of the CEO, and independent directors will oversee the restructuring. While Sears and Kmart stores and the online business will remain open, the company will shut 142 unprofitable outlets near the end of the year, on top of 46 unprofitable stores already slated for closure by November.

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Trump has frequently accused China of cheapening its currency to gain a trade advantage, claims Beijing has consistently rejected. That would be a first for China, triggering a process that could lead to punitive steps.

The latest plan would involve closing some of the 866 stores immediately, although it isn't clear how many.

Sears said it has received a $300 million financing package to fund its operations during the bankruptcy proceedings and was negotiating an additional $300 million.

As part of the transition, Sears will also undergo a series of leadership and board changes. Much of his focus has turned to Sears' online presence over upkeep on physical storefronts, many of which total thousands of square feet.

At the start of August, there were 866 Sears and Kmart stores.

Lampert himself has had a controversial tenure at Sears.

But Sears lost its footing in the 1980s with expansions into financial products such as banking, mortgages, insurance and credit cards, and Walmart Inc supplanted Sears as the biggest retailer in the early 1990s. Options could range from food halls to pop-up stores to Tonya-Harding-esq skating rinks, Rosenblum said - so long as the concept was about more than just shopping. Lampert personally owns 31 percent of the companys shares.

"Here you have what was the original Amazon on steroids", Rosenblum said.

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