Struggling Sears lives on with help of chairman
Print Edition
Sears will live on — at least for now.
The company’s chairman and largest shareholder, Eddie Lampert, won a bankruptcy auction for Sears in New York, averting liquidation of the iconic chain, according to a source familiar with the negotiations.
Lampert was the only one to put forth a proposal to rescue the floundering company in its entirety. He had sweetened his bid multiple times to more than US$5 billion over the last few days through an affiliate of his hedge fund ESL. Details of the final terms are not known.
Lampert, who steered the company into bankruptcy protection, may be able to keep the roughly 400 remaining Sears stores open, which would mean tens of thousands of jobs are saved, at least for now.
Whether Sears, founded 132 years ago as a mail order watch business, can survive in the era of Amazon remains questionable.
When Sears filed for Chapter 11 bankruptcy protection in October, it had 687 stores and 68,000 workers. At its peak in 2012, it had 4,000 stores.
Lampert says there’s still potential for the company even as it struggles to compete not only with Amazon, but Walmart, Target and dollar stores that have carved out their own niche.
“While there’s no doubt that a shrunken Sears will be more viable than the larger entity, which struggled to turn a profit, we remain extremely pessimistic about the chain’s future,” said Neil Saunders, managing director of GlobalData Retail. “In our view, Sears exits this process with almost as many problems as it had when it entered bankruptcy protection. In essence, its hand has not changed, and the cards it holds are not winning ones.”
Under Lampert, Sears has survived by spinning off stores and selling brands that had grown synonymous with the company, like Craftsman. Lampert has lent his own money and cobbled together deals to keep the company afloat, although critics said he has done so with the aim of benefiting his ESL hedge fund. ESL has maintained that the moves put much needed cash into the business.
Lampert personally owns 31 percent of the Sears’ outstanding shares and his hedge fund has an 18.5 percent stake, according to FactSet.
Four years ago, the company created a real estate investment trust to extract revenue from the enormous number of Sears properties.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
