Sears Holdings, the parent company of department store chains Kmart and Sears, concluded its Chapter 11 bankruptcy proceedings following four years of intense litigation and thousands of court filings.
Sears, Roebuck and Co., commonly known as Sears, was a national chain of specialty retail home-goods stores. The century-old department store retailer filed for Chapter 11 bankruptcy in 2018 following a prolonged period of declining sales, shrinking revenue, high debt payments, and significant liquidity constraints, in addition to competition from other large retailers like Target and Walmart.
Although Sears emerged from the lengthy bankruptcy proceedings alive, the company survives with fewer than two dozen remaining full-line department stores in the U.S., two of which reside in Texas, according to BroStocks and the Sears website.
The next step for Sears Holdings — largely a shell company or paper entity under the name Transformco — is to move forward with the liquidation process on the remainder of its assets, according to the company’s bankruptcy estate reorganization plans, which took effect on October 29.
Ray Wimer, a professor of retail practice at Syracuse University believes the remaining Sears locations stand no chance of remaining in business long and will eventually close.
“They do not have an appealing value proposition to customers and the amount of competition in the retail marketplace offering similar goods means the end will come at some point,” Wimer told Fox News.
Sears was once a sprawling retailer with nearly 700 stores and a strong portfolio of brands and operating businesses, including Kenmore, DieHard, Craftsman, Sears Home Services, Sears Auto Centers, and Innovel. In the past decade, however, Sears’ physical footprint has shrunk by more than 95% to fewer than two dozen stores.
In February 2019, Sears Holdings sold its stores to ESL Investments — a hedge fund owned by former Sears Chairman and CEO Eddie Lampert — in a deal valued at $5.2 billion and included more than 400 retail locations. Since the sale to ELS Investments, other major assets have been spun off or sold.
Today, only a handful of Sears and Kmart department stores remain open in the U.S. Like most brick-and-mortar stores, Sears potentially will face a difficult time in 2023, given worsening economic headwinds due to record inflation and high-interest rates.
Despite the bankruptcy woes, Sears still maintains an active presence on Twitter under the hashtag “#iheartsears,” as well as a dedicated e-commerce site.
