Sears could file for bankruptcy as soon as this week

Cornelia Mascio
Ottobre 11, 2018

CNBC earlier reported that the company was arranging a bankruptcy loan, known as debtor-in-possession financing.

On Tuesday, Sears also brought in restructuring expert Alan Carr as a company director, broadening the six-person board to seven and adding further guidance on how to steer a large company through a bankruptcy filing.

Even a retail rally hasn't been able to save Sears.

Sears, the struggling department store chain and former iconic American retailer, has reportedly hired an advisory firm to prepare a bankruptcy filing. The stock is down some 90% in 2018, and just keeps falling. Spokespeople for Lampert and Sears declined to comment.

Sears stores at Golden Triangle Mall in Denton and Ridgmar Mall in Fort Worth closed this year. Sears's poor performance has always been an issue for owners, but landlords are split between those that are likely cheering the possibility of reclaiming its locations for more profitable tenants and those that see its potential bankruptcy as a negative tipping point. Instead, it was forced to liquidate last March, after creditors balked at providing a new lifeline to the company. In just the last few years RadioShack, Toys "R" Us and Sports Authority have all followed the path to the retailer graveyard.

If Sears were to file for bankruptcy, its financial performance during the upcoming holiday season could prove crucial in determining its future, according to the sources.

Retaining the confidence of vendors is also key to Sears remaining operational.

Sears mentioned those constraints as part of a proposal it offered to sell real estate to help pay down borrowings, which would cut debt by almost 80 percent. The stock, which traded above US$100 a decade ago, has fallen to less than $1 in the past year.

Lampert has been willing to pour additional cash into the company in return for debt backed by real estate or other hard assets.

It warned in September for a second time that it could go out of business, hurt by falling foot traffic at its brick-and-mortar stores as customers shift online. The 125-year-old retailer, based in Hoffman Estates, Illinois, has relied on piecemeal deals and infusions from the hedge fund manager to offset billions of dollars in losses.

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