The company listed $6.9 billion in assets and $11.3 billion in liabilities in documents filed in the US Bankruptcy Court in the Southern District of NY. According to Business Insider, there were 866 Kmart and Sears stores still open as of September 13, down from almost 2,000 stores five years ago.
Edward S. Lampert, Chairman of Sears Holdings, said the insolvency filing would give the company the "flexibility to strengthen its balance sheet" and enable it to accelerate a strategic transformation.
Sears, the 125-year-old retailer that pioneered the use of the U.S. Postal Service to sell Americans everything from jewelry to tires, has filed for chapter 11 bankruptcy protection. 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. The company had 506 Sears stores and 360 Kmart stores in August. But it faltered as discounters, specialty chains and online merchants wooed consumers away in recent decades, and it never seemed to find the niche that would keep them coming back.
Real estate experts believe that Sears' move to further shutter stores as part of its restructuring would be a mixed blessing for landlords. He said the bankruptcy process would allow the company to shed debt and costs and "become a profitable and more competitive retailer".
Buckling under pressure, the bankruptcy announcement comes ahead of a $134 million (£102 million) debt repayment due at the start of this week. The company is negotiating an additional $300 million in financing from ESL Investments, a hedge fund run by Sears' former chief executive, Eddie Lampert.
The company made a filing under the Chapter 11 of the United States Bankruptcy Code on Monday.
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A key unresolved aspect of Sears' negotiations with lenders involves setting deadlines for Sears to achieve specific business goals while under bankruptcy protections, the sources said.
Lampert, the largest shareholder, has been loaning out his own money for years and has put together deals to prop up the company, which in turn has benefited his own ESL hedge fund.
Saunders of GlobalData Retail spared no criticism of Sears in his analyst note, listing failing after failing of the company. Sears merged with Kmart in 2005. It listed $6.9 billion in assets and $11.3 billion in liabilities in documents filed in the bankruptcy court, Reuters reported. Decades earlier, it had been dethroned by Walmart Inc.as the biggest. Tools were more likely to see discounts of 10% to 20% off, while most lawn mowers, snow blowers, home appliances, and other big-ticket items were discounted at roughly 30% to 40%.
She said a refrigerator her mother bought at Sears broke after two years and it still hasn't been fixed for nearly a month with no help from the retailer. Other stores will be conducting sales and closing by November 2018.
As for the 142 new store closures announced this week, Sears says, "Liquidation sales at these stores are expected to begin shortly". The company now has 506 stores in operation.
As of May, it had fewer than 900 stores, down from a 2012 peak of 4,000.