Sears files Chapter 11, to close 142 stores
Sears Holdings announced Monday that it had filed for Chapter 11 bankruptcy protection, saying that the company plans to close 142 “unprofitable” stores amid a struggle to meet debt payments.
In a news release, the company said that liquidation sales at the stores were expected to begin soon. It did not provide information on which stores would be closed or how many jobs would be affected.
According to a list obtained by USA Today, three Kmart stores in the Pittsburgh area will close by the end of this year as part of the restructuring, as well as a Sears store in Pittsburgh.
Sears has 54 locations in Pennsylvania, including a department store in Cranberry Township. The closures announced Monday come after years of sustained efforts by the company to reduce the number of Sears and Kmart stores in operation — including locations in Butler County.
In 2016, the Sears store at Clearview Mall closed as part of a nationwide shutdown of 50 stores; and last year the company closed the Kmart store in Butler's Pullman Square as part of a 49-store shutdown.
This year the company, which had shrunk from 4,000 stores in 2012 to fewer than 900 in May, had already announced that it was closing 200 stores.
The bankruptcy filing came just before a $134 million debt payment came due Monday. The company announced that it had received $300 million worth of commitments for debtor-in-possession financing. That's money that will be used to sustain the company through its restructuring period.
Sears also announced that it is pursuing an additional $300 million in financing from the hedge fund ESL Investments, which is the company's largest stockholder and creditor.
“(Sears) intends to reorganize around a smaller store platform,” the company said in a news release Monday. “The company believes that a successful reorganization will save the company and the jobs of tens of thousands of store associates.”
The Chapter 11 filing also came with leadership changes for Sears, which announced that CEO Edward Lampert had stepped down but would remain chairman of the company's board, which had created a special committee to oversee the restructuring process.
It also appointed Mohsin Meghji, the managing partner of M-III Partners, which is serving as restructuring adviser, as its chief restructuring officer.
NEW YORK — Sears, which got its start as a watch seller more than 130 years ago, grew to become one of the world’s largest retailers. But Monday, the company filed Chapter 11.A look at Sears through the years:1886 — Richard Sears starts the R.W. Sears Watch Co. in Minneapolis.1888 — The Sears catalog is born, featuring watches and jewelry. By 1894, sewing machines, baby carriages and other items are added.1893 — The company becomes Sears, Roebuck and Co.1906 — Sears becomes a public company.1913 — Sears launches the Kenmore brand of sewing machines. Today, refrigerators, washing machines and other appliances are sold under the name.1925 — The first Sears brick-and-mortar store opens in Chicago.1927 — Sears buys the Craftsman trademark for $500 and begins to sell power tools under the brand about two years later. In 2017, it sold the brand to Stanley Black & Decker in a $900 million deal.1931 — Allstate Insurance is launched, offering auto insurance. Sears sold its stake and Allstate became an independent company in the 1990s.1973 — The company finishes building its new headquarters, the Sears Tower in Chicago. At the time, it was the world’s tallest building at 1,454 feet tall. Sears sold the landmark in 1994. Its current headquarters are in Hoffman Estates, Ill.1985 — The Discover Card is introduced nationally. Sears spun off a financial company in the 1990s which included the card.1993 — Sears stops sending its famous catalog.2005 — Kmart buys Sears and the company becomes the Sears Holdings Corp.2017 — The company announces plans to cut $1 billion in costs by selling more store locations, cutting more jobs and putting more of its famous brands on the block.2018 — Files Chapter 11 bankruptcy.
