Sears wins reprieve from liquidation as Chairman Lampert makes last-minute bid on bankrupt company
S E E D E D C O N T E N T
Department store chain Sears won a reprieve from liquidating Friday after its chairman, Eddie Lampert, submitted a bid in an effort to buy the retailer and keep it alive, people familiar with the situation tell CNBC.
Lampert's hedge fund ESL Investments put forward his tentative proposal for Sears earlier this month with his formal submission due today.
A bid could help divert liquidation, but may not necessarily. Sears' advisors have until Jan. 4 to decide whether ESL is a "qualified bidder." Only then, could ESL take part in an auction against liquidation bids on Jan. 14. They will weigh the value of Lampert's bid against offers to liquidate the company.
The terms or structure of Lampert's bid could not immediately be determined. If it is similar to the $4.6 billion proposal Lampert outlined earlier this month, it is likely to face push-back from the company's unsecured creditors. As part of the initial bid, which regulators required Lampert to make public, financing would in part stem from $1.8 billion in debt that Lampert would forgive through a so-called "credit bid."
Unesecured creditors said earlier this month they will object to a credit bid. Those creditors believe there may be claims against Sears for transactions under Lampert's leadership. Those deals include Sears' spinoff of Lands' End and transactions with Seritage Growth Properties , a real estate investment trust Lampert created through select Sears' properties.
The company filed for bankruptcy on Oct. 15. At that time it said it would close 142 unprofitable stores, then in November it announced the closure of 40 additional stores . On Friday, it disclosed plans to close 80 more stores, bringing the total closures to more than 260, or more than a third of its 700 or so stores. The 125-year-old company has more than 68,000 employees.
Once the nation's biggest retailer, it was also its first "everything store," stocking everything from jewelry to clothing, from hardware to prefabricated homes. But the department store industry has struggled over the past half-decade, as the mall has become less convenient and apparel more casual. Rival J.C. Penney has also felt the pressure, on Wednesday its shares dipped below a $1 for the first time .
The people requested anonymity because the information is confidential. ESL did not immediately respond to comment. Sears declined to comment.
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Personally, I think this chain can be saved if some major changes take place. Penny's I am not so sure about. They don't have the major brands that Sears has and they need to bring back automotive, too.
They sold off Lands End, and Craftsman to Lowes, Auto is done they will not bring it back, it's been a money loser for the company for the last ten years....
How can they bring it back? They need to go online massively, not the phony retail everything but have nothing cluster f**k they had as a website. Actually have product to distribute.
They closed all three stores in my neck of the woods, all anchor tenants in their respective malls. You could hardly see any shoppers in them. The last time the wife an I were in a sears (South Hill Puyallup) I think we were the only shoppers in the store, and we still had to wait for a CSR......
I really don't know if it can be brought back, like K-marts, outside of Craftsman they really had nothing anyone wanted, and Craftsman needed an infusion of ideas.....
An American icon falls to changing times....
My mom used to love Kenmore appliances because they were so reliable. And then they weren't, anymore.
I bought a treadmill from Sears a few years back, and it was a mess trying to get it to my house. Never again.
G.E. used to be a reliable brand also, and then they weren't. Globalism sucks.😞
Sears used to be my favorite store. I bought a lot of stuff there over the years. I went to Sears about 2 years ago after going online and shopping prices for appliances for a kitchen remodel. The store was a mess. The shelves were in dire need of restocking. Help was nearly non-existent. They wouldn't honor the online price for the range so I went home to order it online. When I got home I found the online price was now suddenly even higher than the in-store price. I bought the range, and all the other appliances, somewhere else. That store is now closing but, honestly, I don't know how they kept it open this long.
Ours too, back in the early 90's when they started the appliance repair service we bought in all the way. I think that was their high point....
After a couple of years the exceptions were beginning to eat away at the value of the program. But it was nice having parts/repair outlets within a few miles for anything Sears sold...
I still have my Craftsman toolbox from 30+ years ago... Now I've got to look elsewhere cause from what I've heard Lowe's isn't going to honor the replacement warranties....
The last thing I bought was a battery for my riding lawnmower, they had three of them, two months later we were back looking at full size freezers and ran into the online/store price scam.... we appeared to be the only customers in the store and still had to wait for service...
Since my retirement I've not really been in the market to buy tools, of course my sets are still complete. (except for the 1/4 drive, the wife keeps loaning them out to neighbors)
Sad to see it go.......
I don't see how it could continue as the Sears everyone knew and loved....
How can one forgive 1.8 billion in debt. Just act like it was never there?
Our Sears closed several years ago so I no longer care what happens to them.
Though it is sad when all we are going to be left with is walmarts and dollar stores.
My local Sears closed about 9 months ago. They really didn't have much to offer for the last few years anyway, and if one of their products broke down? "It's the consumers fault".
The last thing I bought from them was a washer and dryer. It was Whirlpool. It was about 16 or so years ago. What I liked was they had it there in stock. It was when the front loaders were getting popular.
Broke down about a year ago. Catastrophic injury. Would have cost about 500 to fix it.
Bought a Maytag with the impeller.
Edit: Take that back. I think about five years ago I bought a specialty tool. I use to love Craftsman.
I haven’t been in a Sears in over twenty years. I thought management was driving the business into the ground years ago. I hate bankruptcy protection that screws the creditors and suppliers out of the money owed to them.
I can't help but to suspect that some already very wealthy people have been getting a good deal richer selling off all Sears' assets. Sears tower comes to mind.
It looks like Eddie Lampert plundered Sears, and wants to buy it now that he's made it cheap enough to afford.
That would be my first guess.
It’s getting to be that any store that requires you to get off the couch to make a purchase is doomed. Consequently, the diabetes pharmaceutical industry is thriving.
I got my first credit card from Sears, I needed my mom's help in getting it, I needed a washer and she was in good standing with Sears so they gave me a credit card with just enough credit to pay for the washer. Never defaulted on payment, that's how I built up my credit.
Bought most of my major appliances there through the years, but when I needed a new refrigerator (a week before going to Jamaica) Sears let me down, their selection was terrible so we bought a frig from Orvilles. After my husband died I needed a new frig for my bar, once I again I looked to Sears the one thing that stopped me from buying from them is Lowe's had the exact same frig at the same price but Sears charged for deliver and Lowes didn't....guess where I bought my frig.
Never went back to buying major appliances from them.
I don't know if Sears is even worth saving now, they sold off the Craftsman and Kenmore brands. Besides Eddie Lampert is the Idiot who ran them into the ground and sold off their biggest most trusted brands, he has done everything wrong so what in hell would make anyone think he can turn it around now ? I always liked the Sears brands because you could always get any part from Sears to fix them, they were always very good about that. I still have my Sears branded Atari 2600 and it still works.
I've kind of got the feeling that he was doing all of this on purpose, to line his own pockets at the expense of the corporation.