Sears Files for Bankruptcy, Plans Store Closures

One of America’s retail institutions may be going under.

By
Tech
17,925 Hypes 27 Comments

Alhough many American retailers have adapted or improved on the gloomy outlook from even a single year ago, one major outpost hasn’t been able to pivot swiftly enough. Sears has filed for Chapter 11 bankruptcy to protect its shareholders, while CEO Edward “Eddie” Lampert has stepped down (he will stay on as the company’s chairman however).

Over the course of a decade, Lampert has tested out a variety of strategies to beat out Sears’ rivals, at the expense of strong core leadership and innovation. “Sears stopped innovating,” Craig Johnson, president of Customer Growth Partners, told the New York Times. “There are generations of people who grew up on Sears and now it’s not relevant.” Sears, Roebuck & Company was founded shortly after America’s Civil War in the late 19th century, enjoying great success in the 20th and early 21st centuries due to a legacy of reliable service, quality goods and seasonal catalogues. “They sold fundamental products that consumers needed,” said Barbara E. Kahn, marketing professor at Pennsylvania’s Wharton School.

A year after Lamper took over the then-bankrupt Kmart in 2003, he merged it with Sears in a bid to challenge opposition like Walmart and Amazon with an overwhelming number of retail locations. However, poor management only worsened the plight of both companies. Recently, Sears wound up saddled with a total debt of approximately $5.6 billion USD, following a five-year loss of approximately $5.8 billion USD in revenue and over 1,000 store closures.

Analysts point to the company’s floundering e-commerce services and vanishing assets as signs of the company’s initial spiral towards bankruptcy. Though the ’90s had seen the rise of strong competitors like Home Depot and Walmart, Sears had strength in numbers and key in-house brands that customers trusted, like Coleman and Land’s End. Lampert has since sold off these brands and is angling to purchase the company’s Kenmore line for $400 million USD.

Most believe that Lampert, already a hedge fund-billionaire, will be the last man standing once Sears tumbles — the Florida-based chairman owns nearly 40 percent of Sears’ debt and could force the company to repay its debt to him by selling off or transferring ownership of its remaining stores. Furthermore, he sold off many of the spaces now occupied by closed Sears and Kmart locations to Seritage, a real estate company invested in and chairmanned by Lampert.

Time will tell if Sears recovers from the potential bankruptcy and what will become of the company’s management.

In other retail news, the once-floundering Toys “R” Us may be aiming to enact a comeback.

Read Full Article
Source
The New York Times

Join Our Discussions on Discord

The HYPEBEAST Discord Server is a community where conversations on cultural topics can be taken further.

512 Users Online

What to Read Next

Step Inside Shepard Fairey's Largest Solo Exhibition With "DAMAGED" VR/AR Experience
Arts

Step Inside Shepard Fairey's Largest Solo Exhibition With "DAMAGED" VR/AR Experience

Now available to download on all mobile devices.

adidas Celebrates 20th Anniversary of Adam Sandler's 'The Waterboy'
Fashion

adidas Celebrates 20th Anniversary of Adam Sandler's 'The Waterboy'

The ’90s comedy classic receives a commemorative capsule collection.

Doug Aitken Transforms Historical Detroit Bank into a Mirrored Suburban House
Arts

Doug Aitken Transforms Historical Detroit Bank into a Mirrored Suburban House

An immersive installation entitled ‘Mirage Detroit.’


adidas Harden Vol. 3 Pays Homage to Summer Hoops with "Drew League" Colorway
Footwear

adidas Harden Vol. 3 Pays Homage to Summer Hoops with "Drew League" Colorway

“The Beard” and company look to take down all competition this season.

Afew Is Giving Away Its 10 Best Collabs for 10th Anniversary
Giveaways

Afew Is Giving Away Its 10 Best Collabs for 10th Anniversary

Sneakers, jackets, books and more.

Tekla & André Saraiva to Release Limited Edition 'Mr. A' Blanket
Arts

Tekla & André Saraiva to Release Limited Edition 'Mr. A' Blanket

Made especially for the iconic French artist’s Hôtel Amour in Paris.

More ▾
 
Subscribe to our Newsletter

Gain access to exclusive interviews with industry creatives, think pieces, trend forecasts, guides and more.

By subscribing, you agree to our Terms of Use and Privacy Policy.

Help us serve you better

We appreciate your support in allowing HYPEBEAST ads, where we can share contents from the latest fashion, to those culturally relevant. In adding HYPEBEAST to your ad blocker's whitelist, ads on our sites will show while you continue to browse.