Report: Sears bankruptcy imminent
After years of belt-tightening under former Greenwich resident Edward Lampert, Sears Holdings is readying to file for bankruptcy protection, according to the Wall Street Journal.
Hoffman Estates, Ill.-based Sears has hired M-III Partners to assist it in a bankruptcy filing that could come as soon as this week, the Journal reported citing several unnamed sources, with the company facing $134 million in payments due Monday.
In southwestern Connecticut, Sears has department stores at the Danbury Fair mall and the Connecticut Post mall in Milford, and elsewhere in the state in Manchester, Meriden and Waterford. Sears also owns Kmart, which is in the process of closing a Milford location as part of a plan revealed in August to close nearly 50 stores nationally.
Sears shares were down more than 30 percent before Wednesday’s opening bell to 40 cents, compared to an adjusted price of nearly $32 a share when Lam- pert became CEO of Sears in January 2013.
Any imminent bankruptcy by Sears would mark the second major action this month, after Mattress Firm filed this week for a lightning restructuring it aims to complete before the holidays, with its plan including an initial six store closures in Connecticut, including in Orange.
Sears lost $508 million in its second fiscal quarter of 2018 that ended in late July, compared to a $250 million loss a year earlier. Revenue was down 26 percent on a year-over-year basis to below $3.2 billion, with same-store sales off about 4 percent. Sears Holdings operated just over 460 full-service Sears department stores as of July, along with 380 Kmart locations.
Lampert controls Sears through his ESL Investments hedge fund, which moved its main office to Miami in 2012 from Greenwich. As Sears has struggled to reinvigorate its core retail store business, Lampert has divested major assets including last year’s $900 million sale of the Craftsman brand of tools and equipment to Stanley Black & Decker, which this past August relaunched the brand with a distribution agreement with Sears rival Lowe’s.
Lampert has separately floated the idea of ESL funding a $400 million spinoff of Sears’ Kenmore line of home appliances, and has created a real estate company called Seritage which inherited Sears-owned properties for redevelopment, including one in West Hartford that is now an REI outdoors store.