- Iconic U.S. retailer faces shutdown
- Chairman Edward Lampert attempting rescue
- Stock falls by more than 40%
Iconic U.S. retailer Sears could be facing an ignominious end after a long spell of 126 years of continuous business trading.
On Tuesday, reports surfaced that the company, which was famous in the past for its catalog-based operations model, has now asked a judge to proceed with plans for the liquidation of Sears Holdings Corp. (SHLDQ)
Current Sears Chairman and former CEO Edward Lampert had made a rescue bid worth $4.4 billion for the struggling retailer, but the latest news reveals that the company itself couldn’t come to terms.
Lampert and his hedge fund, ESL Investments Inc., will use their lawyers to petition U.S. Bankruptcy Judge Robert Drain in the Southern District of New York with the aim of receiving more time to put an improved bid forward, sources revealed.
However, no official comment has been forthcoming from ESL Investments.
In the wake of filing for Chapter 11 bankruptcy protection in October, Sears has shut down hundreds of its stores. Sears’ assets are scheduled for a bankruptcy auction on January 14.
In addition to the company’s still-significant assets, there are around 68,000 employees who could lose their jobs if the company ceases operations completely.
This latest piece of bad news for U.S. retail means that liquidation could proceed within weeks. On Tuesday, Sears’ stock fell by 46.6% to hit 16 cents per share.
Sears has seen its once-popular catalogs and brick-and-mortar stores fall out of favor amid competition from digital alternatives such as Amazon. Having once boasted stores at more than 3,000 locations, the rescue bid from Lampert’s hedge fund would aim to keep about 425 stores open, and 50,000 employees’ jobs could be saved.