Sears files for bankruptcy protection; to close 142 more stores

Sears Holdings Corp. this morning announced that it had filed for bankruptcy protection for its Sears and Kmart stores in U.S. Bankruptcy Court for the Southern District of New York in White Plains.

Sears Holdings said in a statement that it intends to reorganize around a smaller group of stores that have performed well. It said that it would close 142 unprofitable stores near the end of the year. These closings are in addition to the previously announced 46 stores that are expected to be shuttered by next month. It did not indicate which stores would be closed. Sears had $11.3 billion in liabilities compared with $6.9 billion in assets.

Locally, Sears stores are at the Galleria at White Plains, the Cross County Shopping Center in Yonkers, The Shops at Nanuet, the Jefferson Valley Mall in Yorktown Heights, Poughkeepsie Galleria and the Danbury Fair Mall.

UPDATE: Locally, the stores scheduled to close are at the Jefferson Valley Mall and The Shops at Nanuet. The Kmart in Mahopac is also on the list of those stores scheduled to close.  

Nationally, there are about 670 Sears stores. There are about 735 Kmart stores nationwide, as well as Guam, Puerto Rico and the U.S. Virgin Islands.

Sears and Kmart stores, as well as online and mobile platforms will remain open for business during the reorganization.

As part of the reorganization plan, Sears Holdings has received a commitment for a $300 million loan from ESL Investments, a hedge fund once based in Greenwich, Connecticut. Edward S. Lampert, chairman of Sears Holdings, is ESL”™s chairman and CEO. He founded the hedge fund in 1988. Lampert this morning stepped down from his role as CEO of the company, but will remain chairman of the board.

In his place, the company created Office of the CEO, which will be composed of CFO Robert A. Riecker; Leena Munjal, chief digital officer of  customer experience and integrated retail; and Gregory Ladley, president of Apparel and Footwear.

Sears Holdings said it intends to continue to pay employees, honor member programs and pay vendors and suppliers.

“The company believes that a successful reorganization will save the company and the jobs of tens of thousands of store associates.”

Lampert, who lives in Miami Beach with his family, said in a statement: “As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers. We thank our vendors for their continuing support through the upcoming season and beyond. We also thank our associates for their hard work and commitment to providing millions of Americans with value and convenience.”

Lampert was chairman of Kmart in 2004 when his company and Sears merged in an $11 billion deal. He took over as CEO of Sears in January 2013.
In 2003, Lampert was kidnapped from a parking garage at ESL”™s offices in Greenwich. According to reports, he was held for ransom for 30 hours before negotiating his release. The kidnappers were caught when they used Lampert”™s credit card to buy pizza. In 2012, Lampert moved his hedge fund from Greenwich to Bay Harbour Islands, Florida.