Sears Holdings filed for Chapter 11 bankruptcy on Monday, announcing that its CEO is stepping down and another 142 stores will be shuttered by the end of 2018. In 2004, the company was acquired by hedge fund manager Edward Lampert and merged with K-Mart. But with its sheer colossal size, Sears' reorganisation in court will have even wider ripple effects. The operator of Sears and Kmart stores joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate. Less clear are the fortunes of the 90,000 or so current Sears workers nationwide.
At its peak, Sears sold everything from toys to auto parts to mail-order homes, and was a key tenant in nearly every big mall across the United States.
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. He also called on the company to sell off $3.25 billion in real estate and assets.
The most recent filing from Sears showed it had only $193 million in cash on hand as of August 4, the end of its last fiscal quarter. Sears opened its first store in 1925 in Chicago, and the Sears Tower in that city, now known as the Willis Tower, was the world's tallest building when it opened in 1973. The original Kmart store in Garden City closed a year ago.
Lampert tried multiple strategies to revive Sears since using the Kmart chain to acquire Sears in 2005, sometimes with his own money. Sears stock is down 89 percent year-to-date.
For decades, Sears was king of the American shopping landscape. It has been run over that period by the hedge fund manager Eddie Lampert, who sold off numerous firm's brands and properties but failed to win customers back, many of whom now prefer to shop online. Since a year ago alone, Sears has closed more than 380 of its 894 stores, down from 2,200 stores in the US and Canada in 2005. "Put bluntly, it has failed on every facet of retailing from assortment to service to merchandise to basic shop keeping standards".