Published: Thu, October 11, 2018
Markets | By Otis Pena

Sears On Brink Of Bankruptcy, Report Says

Sears On Brink Of Bankruptcy, Report Says

Even a retail rally hasn't been able to save Sears.

After years of store closures, Sears, once the world's largest retailer, could be just days away from facing bankruptcy. The stock is down some 90% in 2018, and just keeps falling.

Sears had no comment on the report.

Sears stores at Golden Triangle Mall in Denton and Ridgmar Mall in Fort Worth closed this year.

Restructuring through a bankruptcy filing may not solve Sears' underlying problems, which include lost market share and disillusioned customers, Saunders noted. Lampert is the company's biggest shareholder.

The announcement was made as Sears, led by CEO and Chairman Eddie Lampert, is nearing a key debt repayment in less than a week.

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The Wall Street Journal quoted sources saying Lampert wants to restructure and is anxious that a bankruptcy filing will lead to a liquidation, which has happened with so many retailers, the most recent being Toys R Us.

If Sears were to file for bankruptcy, its financial performance during the upcoming holiday season could prove crucial in determining its future, according to the sources. "That is a real risk that we saw happen with Toys "R" Us", said Sandy.

Sears shares were down more than 28 percent in early morning trading Wednesday. The stock, which traded above US$100 a decade ago, has fallen to less than $1 in the past year.

The Hoffman Estates, Illinois-based retailer has posted seven straight years of losses and its sales have not grown since the 2008 financial crisis. Sears wants to reduce its debt load by 80%, hoping creditors will bite at the chance to make a deal while the company is still a going concern. The Sears special committee had also been weighing a prior offer from Lampert to acquire the retailer's Kenmore appliances brand and its home services business for as much as $480 million.

Lampert, who for weeks has been pushing a debt restructuring proposal that would avoid a Chapter 11 filing, is now focused on a deal that would preserve stakeholders' value in a court restructuring, according to a person with knowledge of the matter.

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