Sears, once America’s most iconic retailer, is reportedly on the verge of filing for bankruptcy . Sears CEO Eddie Lampert has blamed the company’s decline on the media, shifts in consumer spending, and the rise of e-commerce, among other reasons.
A common inquiry we ran across in our research was “Why is sears closing?”.
Here is what our research found. Sears CEO Eddie Lampert has blamed the company’s decline on the media, shifts in consumer spending, and the rise of e-commerce , among other reasons. But analysts and critics say the company’s demise is the result of years of under-investments in stores.
Why did Sears go out of business?
Fast forward less than two decades later to 2018 when Sears was in so much financial hardship with declining sales and profits as well as mounting debt it filed for bankruptcy . Hedge fund manager Edward Lampert, who already was Sears’ largest shareholder, purchased the company in bankruptcy proceedings for only $5.2 billion.
Sears Holdings (SHLD) filed for Chapter 11 bankruptcy on Oct. 15, 2018. 1 A wave of store closures and deals in desperate attempts to stay afloat failed to save the struggling retailer , which listed $6.9 billion in assets and $11.3 billion in liabilities in the filing.
Sears Holdings spun off and sold many of its business units and brand names. A bankruptcy judge approved the sale of the company’s assets for $5.2 billion to Lampert in a bankruptcy auction. About 425 stores remained open as of April 2019 , with nearly 45,000 jobs intact.
Sears Holding Corporation filed for Chapter 11 bankruptcy on Oct. 15, 2018. Prior to that announcement, Sears Holdings was already closing Sears and Kmart stores nationwide .
, and just barely . Once the nation’s leading retailer up through the 1980s, the company that now owns the Sears and Kmart chains emerged from bankruptcy less than two years ago.
The company announced in a statement that CEO, Edward Lampert, would step down, with day-to-day operations managed by three high-ranking executives. Lampert remained chairman of the board. 1 The firm began to restructure after it failed to pay back $134 million that was due on Oct. 15.
How did Sears reinvent the future of retail?
Sears took this threat seriously and started opening stores in the 1920s and by 1931 sales from Sears’ stores outstripped catalogue sales. Don Katz, author of the book “The Big Store”, which provides an insider’s look at Sears says that Sears reinvented the future not once but twice when it opened up brick and mortar stores .
How many Sears stores are closing?
When the latest round of store closings is complete, the company will be down to about 1,000 locations total. The mistake Sears made, say experts, was failing to invest that savings to rebuild the business.
The company is doing just that. It announced in the last week that it’s closing 150 Sears and Kmart stores, or roughly 10% of its store base, in early 2017.
Is Sears in bankruptcy?
But the fact that Sears isn’t in bankruptcy is not a sign of health , according to experts. The company has made little effort to reinvigorate stores, grow sales or turn its failing business around.
Is Sears on the brink of bankruptcy?
As for Sears, it wouldn’t even buy lights for its stores. It’s now on the brink of insolvency and limping its way into retail irrelevance, having lost nearly $6 billion over the past five years and downsizing its roster of stores to just a few hundred.