NEW YORK: A bankruptcy judge on Monday approved $300 million in financing to keep department store chain Sears Holdings Corp open through the holiday season, giving the century-old retailer that once dominated US shopping malls a chance to remain in business.
Sears filed for Chapter 11 bankruptcy protection in New York with a plan to close about 142 of its 700 stores by year-end and sell its best-performing stores in an auction in January to a buyer that will keep them operational.
The bankruptcy filing by the parent of Sears, Roebuck and Co and Kmart Corp follows a decade of revenue declines, hundreds of store closures, and years of deals by billionaire Eddie Lampert in an attempt to turn around the company he acquired in 2005 for $11 billion.
Lampert, who stepped down as Sears CEO but will remain chairman, had pledged to restore Sears to its glory days, when it owned the tallest building in the world and companies that included a radio station and Allstate insurance.
But the company, which has close to 70,000 employees, has not turned a profit since 2011, and critics say Lampert let the stores deteriorate over the years, even as he bought the company’s stock and lent it money, making him its largest shareholder and creditor.
“For somebody of my generation, Sears Roebuck was a big deal... Sears has been dying for many years, it has been obviously improperly run for many years, and it’s a shame,” US President Donald Trump told reporters on Monday. US Treasury Secretary Steven Mnuchin was on Sears’ board of directors between 2005 and 2016.
Lampert and his hedge fund ESL Investments Inc own just under 50 per cent of Sears’ shares and are its biggest creditor, with about $2.5 billion owed to him and ESL. — Reuters
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