Sears, the Amazon of its day, files for bankruptcy

Sears, the Amazon of its day, files for bankruptcy

The bankruptcy, which Sears said would help it to restructure its business, comes after years of decline.

It's been a rough year for large brick-and-mortar stores, with Toys "R" Us failing to emerge from bankruptcy proceedings and closing all its stores.

The company, which owns the discount chain Kmart, has filed for chapter 11 bankruptcy in NY as it struggles with a debt burden of $5.6bn (£4.3bn). The company is negotiating an additional $300 million in financing from ESL Investments, a hedge fund run by Sears' former chief executive, Eddie Lampert. Mall economies haven't been very good lately anyway, and one has to wonder how many of those operators will need to get some bankruptcy relief if and when Sears collapses. But any movement toward bankruptcy seemed to gain momentum last week with reports that Sears had hired New-York based M-III Partners to prepare the filing. Since past year alone, Sears has closed more than 380 of its 894 stores, down from 2,200 stores in the USA and Canada in 2005.

In a March 2017 government filing, Sears said there was "substantial doubt" it would be able to keep its doors open - but insisted its turnaround efforts would mitigate that risk. In April and August, ESL presented proposals to acquire certain Sears assets, followed by a broader September plan for real estate transactions and asset sales. A long series of store closings has left it with under 900 today. Lampert partially spun off the company from its parent in 2012 and was Sears Canada's biggest shareholder.

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Parts of Sears have already been through bankruptcy. Sears merged with Kmart in 2005.

Sears, which sold everything from Craftsman tools to Kenmore appliances, lost its footing in the 1980s with expansions into financial products such as banking, mortgages, insurance and credit cards.

There will be a lot of people who won't have jobs on the back end of this move, as necessary as it might be, and a lot more who have to look at management's track record and assume the rest might be gone in the near future, too.

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