Sears Holdings is preparing for a possible bankruptcy even as CEO Edward Lampert continues his push to shrink the once-dominant retailer back to profitability.
Sears has hired advisers to prepare a possible bankruptcy filing that could come as early as this week, according to the Wall Street Journal. The move comes as the struggling chain faces a Monday deadline to make a $134 million debt payment.
Lampert’s efforts to keep Sears out of bankruptcy have included shedding hundreds of unprofitable stores: Sears and Kmart had some 3,500 locations when they merged under Lampert in 2005; now there are about 900 nationwide.
Last month he proposed a last-ditch effort to avoid bankruptcy by shaving more than $1 billion from Sears’ $5.5 billion debt load, in part by selling another $1.5 billion in real estate. The strategy worked before. In August, Sears made $2.7 billion selling more than 200 stores to Seritage Growth Properties, a real estate investment trust that was formed to convert former Sears and Kmart stores.
Sears has endured more than $11 billion in losses since 2011, and its annual sales have dropped nearly 60 percent in that period, to $16.7 billion. Analysts say it needs to raise more than $1 billion a year to stay afloat. [WSJ] — John O’BrienRecommend0 recommendationsPublished in