Company plans to close another 142 Sears and Kmart stores
At the time of the filing, the company had 700 stores and 68,000 employees.
“Over the last several years, we have worked hard to transform our business and unlock the value of our assets,” said Sears Holdings chairman Edward Lampert. “While we have made progress, the plan has yet to deliver the results we have desired, and addressing the company’s immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer. The Chapter 11 process will give Sears Holdings the flexibility to strengthen its balance sheet, enabling the company to accelerate its strategic transformation, continue right sizing its operating model, and return to profitability. Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debtholders, and be better positioned to execute on our strategy and key priorities.”
The Chapter 11 filing came after the company missed a $134 million debt payment due Monday.
Sears Holdings said it has received commitments for $300 million in senior priming debtor-in-possession financing and is negotiating a second $300 million subordinated DIP financing agreement with ESL Investments Inc., which is headed by Lampert and is Sears’ largest stockholder and creditor. The DIP financing arrangements, which are subject the court approval, should improve Sears’ financial position and support its operations during the financial restructuring process, the company said.
The company added that its Sears and Kmart stores, and its online and mobile platforms, will remain open for business, and said that it is committed to working with its vendors and other partners to help maintain inventory levels and ensure timely product delivery.
In a statement, Sears said “a successful reorganization will save the company and the jobs of tens of thousands of store associates.”