Sears Files For Chapter 11 Bankruptcy

Posted: Oct 15 2018, 12:53am CDT | by , in News | Black Friday 2018

 

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Sears Files for Chapter 11 Bankruptcy

Another iconic US retailer is hitting hard times.

Sears Holdings today announced to file for Chapter 11 Bankruptcy protection. The possibility of a bankruptcy of Sears has risen up last week now its official.

The Company's Sears and Kmart stores, and its online and mobile platforms, are open and continue to offer a full range of products and services to members and customers. Holdings' services and brand businesses will also continue to operate as usual. Customers should expect Holdings' loyalty programs, including the Shop Your Way membership program, and the Sears and private label credit card rewards programs, to continue as normal. The Company is committed to working with its vendors and other partners to help maintain inventory levels and ensure timely product delivery.

The retail chain expects to move through the restructuring process as expeditiously as possible and is committed to pursuing a plan of reorganization in the very near term as it continues negotiations with major stakeholders started prior to today's announcement.

Holdings has received commitments for $300 million in senior priming debtor-in-possession ("DIP") financing from its senior secured asset-based revolving lenders and is negotiating a $300 million subordinated DIP financing with ESL Investments, Inc. ("ESL"). ESL is the Company's largest stockholder and creditor, and Edward S. Lampert is ESL's Chairman and Chief Executive Officer. Subject to Court approval, the DIP financing is expected to improve the Company's financial position immediately and support its operations during the financial restructuring process.

Holdings has filed a number of customary motions with the Court seeking authorization to support its operations during the restructuring process and ensure a smooth transition into Chapter 11. The Company intends to continue payment of employee wages and benefits, honor member programs, and pay vendors and suppliers in the ordinary course for all goods and services provided on or after the filing date.

"Over the last several years, we have worked hard to transform our business and unlock the value of our assets," said Edward S. Lampert, Chairman of Sears Holdings. "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 Chapter 11 process will give Holdings 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. 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."

Lampert continued, "As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers. We thank our vendors for their continuing support through the upcoming season and beyond. We also thank our associates for their hard work and commitment to providing millions of Americans with value and convenience."

The timing of the Sears Bankruptcy is the worst possible time of the year with Black Friday and Holiday shopping around the corner. It remains to be seen in if Sears and Kmart stores can offer up attractive Black Friday deals and keep shelves stocked for Holiday shoppers. The competition is super tough and it will be hard for Sears to survive.

See also the Walmart Black Friday 2018 Ad details, Amazon Black Friday 2018 plans, Target Black Friday 2018 ad and the Best Buy Black Friday 2018 ad predictions. The actual Black Friday 2018 is on November 23. The whole month of November will be a one big Black Friday sale. For some hot Holiday gifts, it's best to not wait and purchase them now. This is true for the new limited edition Nintendo Switch consoles and these top 10 Holiday toys of 2018.

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The Author

<a href="/latest_stories/all/all/2" rel="author">Luigi Lugmayr</a>
Manfred "Luigi" Lugmayr () is the founding Chief Editor of I4U News and brings over 25 years experience in the technology field to the ever evolving and exciting world of gadgets, tech and online shopping. He started I4U News back in 2000 and evolved it into vibrant technology news and tech and toy shopping hub.
Luigi can be contacted directly at ml[@]i4u.com.

 

 

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