Sears Holdings Corp., the 125-year-old retailer that became an icon for generations of American shoppers, filed for bankruptcy, saddled with billions of dollars of debt racked up as it struggled to adjust to the rapid shift toward online consumption.
But the onset of discounters like Walmart created challenges for Sears that have only grown and it faced even more competition from online sellers and appliance retailers like Lowe's and Home Depot.
But it said that it's looking for a buyer for a large number of its remaining stores and that it will close at least 142 stores near the end of this year.
Meanwhile, Sears workers are nervous about what kind of severance they'll receive if their stores close. Lampert gave up his title of chief executive officer as part of the filing.
In a March 2017 government filing, Sears said there was "substantial doubt" it would be able to keep its doors open but insisted its turnaround efforts would mitigate that risk.
Judge Robert Drain will oversee the bankruptcy, with Sears represented by the law firm Weil Gotshal & Manges, according to court documents.
Store shelves have been left bare as many vendors have demanded more stringent payment terms, says Mark Cohen, a professor of retailing at Columbia University and a former Sears executive.
Saudi Arabia warns against sanctions over Khashoggi case
Saudi Arabia warned on Sunday it would retaliate against any sanctions imposed on the Kingdom over Khashoggi's disappearance. Oil futures rose on Monday on concerns about supply, while stocks in Saudi Arabia fell sharply on Sunday.
CEO Eddie Lampert has stepped down, effective immediately.
A key unresolved aspect of Sears' negotiations with lenders involves setting deadlines for Sears to achieve specific business goals while under bankruptcy protections, the sources said. Plus, in bankruptcy proceedings, the largest creditors become the owners of the new entity.
But while retailers typically file for bankruptcy with the intention of staying in business, many end up going bust after filing.
Still, it was unclear whether the company would attempt some other restructuring plan and whether Lampert, would devise another plan to save the company he took over in 2013.
But they will need to do better than a year ago.
At its peak in the 1960s, Sears sold everything from toys to auto parts to mail-order homes, and was a key tenant in nearly every big mall across the United States. In August, it closed 13 Kmart stores and 33 Sears locations, including the Oakland Mall and Jackson Crossing stores. He has so far not disclosed whether he has turned a profit or loss since he invested in Sears following years of complex financial engineering at the company.
In an earlier attempt to avoid bankruptcy, Sears previous year sold its Craftsman tool brand to power tool maker Stanley Black & Decker for $900m.
Sears has hired M-III Partners, a boutique advisory firm specializing in seeing companies through bankruptcies and restructuring, according to the Wall Street Journal. That was an enormous shift for people who lived on farms and in small towns and made numerous goods they needed on their own, including clothes and furniture.