The Sears Bankruptcy
Sears, a well known chain of department stores, was founded in the early 1890’s. The retailer was a pioneer in the modern trend of retailers who attempt to sell such a wide range of products that people can quite possibly find anything they want. Today, we all know Amazon as a retailer with unprecedented options. Well, Sears might well have been the very beginnings of this retail model. The company offered shares to the public in 1906 after its initial public offering. Interestingly, the business began as a mail order business and it wasn’t until 1925 before its first brick and mortar retail locations were started.
The Sears bankruptcy is a story that illustrates the reality of the modern retail environment. Through the 1980s, Sears was one of, if not the single, largest retailer in the United States. This success was short lived. By the 1990s, Walmart and Kmart has eclipsed Sears in sales. This competition led to a steep decline in sales that continued for decades until Sears was not even in the top 20 of retailers by sales volume. Ultimately, and perhaps unexpectedly, Sears filed for bankruptcy on October 15th, 2018.
Some analysts note that the signs of financial trouble with Sears may have been predicted almost a decade earlier when Edward Lampert, the prominent hedge fund manager of ESL Investments, took the helm but began selling assets. Here’s a timeline of the Sears Bankruptcy brought to you by the bankruptcy attorneys at Sawan PLLC.
November 16th, 2004
Eddie Lampert, Chairman of KMart, Purchases Sears
After the purchase, Mr. Lampert also becomes the CEO of the company and Chairman of the Board.
October 15th, 2018
Sears Files for Chapter 11 Bankruptcy Protection
Sears filed for bankruptcy protection on Monday, October 15th, 2018 in New York. Since the company filed under Chapter 11, they also put forth a plan for how they might be able to restructure their business, emerge from bankruptcy and still pay creditors. The main proposal of this plan? Close over 100 unprofitable locations in an attempt to create a lean and profitable retailer despite devastating competition from Walmart and Amazon. On the same day, CEO since 2005, Eddie Lampert, stepped down as CEO (although he remained Chairman of the Board).
December 6th, 2018
Eddie Lampert Offers a Lifeline
December 6, 2018 Lampert, through his company ESL Investments, offered to buy all of Sears for $4.6 billion dollars in cash and stock. The offer would be financed by $950 million in added debt, but no additional cash.
February 7th, 2019
Court Approves Sale to Eddie Lampert
Federal Bankruptcy Judge approves sale of Sears to Eddie Lampert.