Sears near bankruptcy after years of decline

Struggling company’s $134 million debt payment is due Monday

Sears, the struggling department store chain and former iconic American retailer, has reportedly hired an advisory firm to prepare a bankruptcy filing.

The filing could come this week in anticipation of the company’s $134 million debt payment due Monday, The Wall Street Journal reported. A boutique advisory firm — NewYork based MIII Partners — has spent the past few weeks working on the filing, The Journal reported. Still, the possibility of Sears’ final end has loomed for months, and people familiar with the arrangement told The Journal that Sears is still weighing other options. Neither Sears nor MIII Partners returned requests for comment.

Sears’ stock traded down nearly 32 percent in premarket trading Wednesday.

The 125yearold retailer has taken a particular hit as brickandmortar stores around the world have struggled to compete with ecommerce giants and maintain massive showrooms. But if Sears is now in touch with banks to secure the financing needed for a bankruptcy filing, as CNBC reported Wednesday morning, that could send the surest signal that such a move may not be far off.

On Tuesday, Sears also brought in restructuring expert Alan Carr as a company director, broadening the sixperson board to seven and adding further guidance on how to steer a large company through a bankruptcy filing.

Just weeks ago, Sears chief executive Eddie Lampert devised a lastminute plan to save the retailer. The company has a total of about $5.6 billion in outstanding debt and is down to about 820 Sears and Kmart stores. When Lampert took over as head of the company five years ago, there were 2,000 stores. Lampert bought Sears in 2004 and merged it with Kmart, in which he had a controlling stake, the next year.

Lampert — Sears’ largest shareholder and creditor, as well as owner of the hedgefund ESL Investments — asked creditors

last month to refinance $1.1 billion in debt before the Oct. 15 payment, according to a filing with the U.S. Securities and Exchange Commission. He also called on the company to sell off $3.25 billion in real estate and assets. Those include Sears Home Services and the company’s flagship Kenmore brand, which Lampert offered to purchase in August for $400 million.

Lampert himself has had a controversial tenure as chief executive. While much of his focus revolved around Sears’ online presence, upkeep on physical stores has diminished. Lampert’s strategy has often involved keeping Sears afloat with loans.

In the September SEC filing, Lampert’s hedge fund said it “must act immediately to have sufficient runway to continue its transformation” if Sears could ever pull off a turnaround.