In the latest episode of retail carnage, Sears has filed for bankruptcy. Sears’ controlling shareholder, Eddie Lampert, has spent years and millions of dollars keeping America’s most famed retail brand alive. With a chapter 11 bankruptcy filing, Lampert hopes Sears will avoid the fate that befell Toys R Us earlier this year. He’s looking forward to a speedy bankruptcy process and a return to control of Sears. Lillian Rizzo writes at The Wall Street Journal:
Sears Holdings Corp. controlling shareholder Edward Lampert spent years keeping the retailer out of bankruptcy court. Now a $300 million lifeline and a speedy chapter 11 sale may be his best chance at keeping control of its remains.
Early Monday, Sears filed for bankruptcy protection after years of struggle and relentless losses. Sears said in court papers it faces catastrophic consequences if it can’t repair its supply chain and keep merchandise flowing to the company’s stores and warehouses.
Some 200 vendors have stopped shipping goods to its stores in the past two weeks and it faces potential liens if it can’t pay logistics companies owed millions of dollars over the coming weeks, Sears said in court papers. A similar scenario helped fell Toys “R” Us Inc., whose vendors tightened terms and stopped shipping products just before the holidays last year.
Mr. Lampert seems determined to avoid that fate. The financier’s hedge fund, ESL Investments, is slated to provide a $300 million bankruptcy-financing package to help keep the retailer in business. ESL Investments also is in discussions to bid for about 400 of the most profitable Sears and Kmart stores, Sears said on Monday.
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