The filing, made in federal bankruptcy court in New York, comes as Sears has shuttered hundreds of stores in the last year. Sears Holdings, the company that operates both Sears and Kmart, had stores open and 68, employees on Monday — dropping from 1, stores and nearly 90, workers in February. Chief executive Eddie Lampert gave up his title, but will remain chairman of the company. The year-old company reached a deal with lenders over the weekend to stay open through the holidays, the Wall Street Journal reported.
Sears Files for Bankruptcy After Missing $134 Million Debt Payment
More Sears and Kmart Stores Are Closing - List of Closed Stores
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Sears and Kmart shelves will be well-stocked and the retailers have also launched marketing initiatives designed to drive traffic with an emotion-based campaign around their great deals, products and trusted brands. Global rock star Adam Levine's collection is available exclusively at Kmart, while Jaclyn Smith's collection is available at both Kmart and Sears. And at Sears, you'll find amazing deals on appliances, apparel, Craftsman tools and lawn and garden supplies — Sears has the broadest assortment of Craftsman in the country for any DIYer to complete any job.
But most of the coverage has failed to stress the deeper story. Namely, Sears is a prime example of how hedge funds and private equity companies take over retailers, encumber them with debt in order to pay themselves massive windfall profits, and then leave the retailer without adequate operating capital to compete. Part of the strategy is to sell off valuable real estate, the better to enrich the hedge fund, and stick the retail company with costly rental payments to occupy the space that it once owned. In the case of Sears, the culprit is a hedge-fund operator named Edward Lampert, once a senior merger guy at Goldman Sachs. In , Lampert merged Sears with Kmart, loaded both up with debt, and used some of the debt on stock buybacks to pump up the share price and enrich shareholders, notably himself and his hedge fund.