Retail Icon Sears Hires Adviser for Bankruptcy Filing

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Shares of Sears (SHLD.O), an iconic American retail brand which traded above $100 a decade ago but have fallen to less than $1 in the past year, were down at 41 cents in trading before the bell.

Sears is considering filing for bankruptcy protection as soon as this week as it faces a large debt repayment on Monday, reports The Wall Street Journal.

"The problem in Sears case is that it is a poor retailer", said Neil Saunders, Managing Director of GlobalData Retail, in a Tuesday research note, where he wrote that he wasn't surprised the retailer was preparing for a possible bankruptcy filing.

Sears has hired advisers to prepare a possible bankruptcy filing that could come as early as this week, according to the Wall Street Journal.

Representatives from Sears didn't immediately return requests for comment.

While the SPDR S&P Retail ETF (XRT) is up 6.5% year to date, and fellow department stores like Macy's (M), Kohl's (KSS), and Nordstrom (JWN) have climbed more than 30% since the start of the year, Sears has lagged-and how.

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The news comes after a recent announcement of store closings, including stores at the Mall of New Hampshire in Manchester and the Mall at Rockingham Park in Salem. Meanwhile, it has shuttered hundreds of money-losing stores, and it promised to close an additional 150 this year. But if Sears is now in touch with banks to secure the financing needed for a bankruptcy filing, as CNBC reported Wednesday morning, that could send the surest signal yet that such a move may not be far off.

Negotiations between Sears Chief Executive Officer Eddie Lampert and the company's special board committee are at a standstill over the committee's refusal to approve Lampert's rescue plan, the sources said.

Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 USA stores between them.

Sears acquired discount chain Kmart in an $11 billion deal engineered by Lampert in 2004. He also called on the company to sell off $3.25 billion in real estate and assets. Those include Sears Home Services and the company's flagship Kenmore brand, which Lampert offered to purchase in August for $400 million.

Lampert himself has had a controversial tenure as chief executive. Lampert's strategy has often involved keeping Sears afloat with loans. Lampert and his hedge fund own about 50 percent of Sears.

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