US retailer Sears files for bankruptcy
Sears, the 125-year-old US department store chain that was once the biggest retailer in the world, has filed for bankruptcy after years of losses and mounting competition from online rivals such as Amazon.
The company, which owns the discount chain Kmart, has filed for Chapter 11 bankruptcy in New York as it struggles with a debt burden of $5.6bn (£4.3bn). It will shut another 142 stores by the end of the year, following 46 recently announced store closures. The company had 506 Sears stores and 360 Kmart stores in August.
The bankruptcy, which Sears said would help it to restructure its business, comes after years of decline. Once a symbol of the American lifestyle that prided itself on selling everything to everyone, has been losing out to rival retailers Walmart and Amazon.
“The company believes that a successful reorganization will save the company and the jobs of tens of thousands of store associates,” Sears said.
The Sears workforce has dwindled to about 68,000 from 302,000 a decade ago. It has been run over that period by hedge fund manager Eddie Lampert who sold off many of the firm’s brands and properties but failed to win customers back, many of whom now prefer to shop online.
For generations, Sears served working-class homeowners hoping to buy high-quality products by offering them monthly instalment programmes. It started out as a vast mail-order business selling clothes, tools, toys and even tombstones and became the biggest retailer in the US before being overtaken by Walmart and later Amazon. Sears merged with Kmart in 2005.
Sears said in a statement: “The company expects to move through the restructuring process as expeditiously as possible and is committed to pursuing a plan of reorganisation in the very near term as it continues negotiations with major stakeholders.”
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