Sears files for chapter 11 bankruptcy protection in New York
Sears Holdings Corp.
$0.37
11:09 29/10/18
Beleaguered US department store chain Sears has filed for bankruptcy after years of losses and mounting competition from online rivals such as Amazon.
The once iconic American retailer filed for chapter 11 on Monday and said it would shutter a further 142 stores across the US by the end of the year, following 46 recently announced store closures, in an attempt to juggle its $5.6bn mountain of debt.
Sears opted to apply for bankruptcy protection after negotiations between chief executive Eddie Lampert and Sears' special board committee came to a standstill when the committee refused to approve the CEO's rescue plan.
The CEO appealed to Sears' creditors to refinance $1.1bn in debt before its 15 October due date, according to a filing with the US Securities and Exchange Commission, and also called on the firm to dispose of roughly $3.25bn in real estate and assets, including Sears Home Services and the outfit's flagship Kenmore brand.
Rumours of the 125-year-old high street retailer's demise had circled for months; however, Sears was reportedly still weighing other options.
Sears, which owns discount chain Kmart, said the bankruptcy would help it restructure its business and recover from years of losses at the hands of rival retailers Walmart and Amazon.
"The company believes that a successful reorganization will save the company and the jobs of tens of thousands of store associates," Sears said.
"The company expects to move through the restructuring process as expeditiously as possible and is committed to pursuing a plan of reorganisation in the very near term as it continues negotiations with major stakeholders."
As of 1030 BST, Sears shares had lost 16.46% in pre-market trading and were trading at $0.34 each.