Following its Chapter 11 bankruptcy filing, Sears Holdings Corp. plans to close another 142 stores by the end of the year, and Edward Lampert will step down as chief executive but remain chairman.
According to initial court documents in the case, which was filed in the U.S. Bankruptcy Court for the Southern District of New York, as of Aug. 4, Sears had assets of $6.937 billion, and total debts of $11.34 billion.
As of Aug. 4, the company operated 844 Sears and Kmart stores in the U.S. As of May 5, Sears operated 529 Sears stores in the U.S., reports Modern Tire Dealer. In August, a company spokesperson told MTD that 295 Sears Auto Centers were offering tire installation services for Amazon.
Lenders have committed $300 million in financing, and the company is negotiating for an additional $300 million in financing from Lampert’s ESL Investments Inc. The company says this financing "is expected to improve the company's financial position immediately and support its operations during the financial restructuring process," according to an Oct. 15 release.
"Over the last several years, we have worked hard to transform our business and unlock the value of our assets," Lampert said in the release. "While we have made progress, the plan has yet to deliver the results we have desired, and addressing the company's immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer."
The retailer plans to use the Chapter 11 process to give it "the flexibility to strengthen its balance sheet, enabling the company to accelerate its strategic transformation, continue right sizing its operating model, and return to profitability," Lampert said. "Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debtholders, and be better positioned to execute on our strategy and key priorities."
The remaining Sears and Kmart stores will remain open for business during the holiday season.
Some of the company’s vendors are listed among Sears’ creditors who are owed the most money. Given the company’s lengthy efforts to rightsize itself, it’s probably not a surprise that the largest balances belong to those who have offered unsecured notes to the company. The single largest creditor has an unknown balance due — but the ones holding the bag are those with Sears pensions.