Sears Gets a Lifeline: Bankruptcy Judge Approves Sale to Lampert
Sears Holdings got a new lifeline yesterday as its sale to company chairman Eddie Lampert, through an affiliate of his hedge fund ESL Investments, was approved by a federal bankruptcy court judge, according to CNBC. ESL has said the $5.2 billion deal to buy Sears will save 425 stores and roughly 45,000 jobs. While an initial deal was reached last month, the bankruptcy court had to give final approval. Judge Robert Drain, of the U.S. Bankruptcy Court for the Southern District of New York, said he expects to enter the order today, thereby making it official. Lampert's bid through his ESL hedge fund overcame opposition from a group of creditors, including mall owners and suppliers, which tried to block the sale and pushed hard for liquidation.
Total Retail's Take: Even with this latest reprieve, the long-term survival of the iconic retailer remains an open question. Now, it must start the long uphill battle back to profitability, starting by addressing neglected stores, outdated digital efforts and technology, and a host of other issues weighing Sears down. The company hasn't been profitable since 2010, and an extreme overhaul of its physical locations and e-commerce offerings is needed to bring Sears back into competition with other big-box retailers and of course, Amazon.com. What's more, Lampert has yet to publicly announce any specific plans to help turn around the challenged retailer. We will be tracking Sears’ progress closely.