Sears Plans to Shutter as Chairman Eddie Lampert’s Bid Fails
Sears Holdings has rejected Chairman Eddie Lampert’s bid to save the 126-year-old company, setting the storied retailer with more than 50,000 employees on a path to liquidation, people familiar with the situation told CNBC on Tuesday. Sears, which also owns Kmart, planned to announce its liquidation plans Tuesday morning, the people said. Lampert had put forward a $4.4 billion bid to save Sears by buying it out of bankruptcy through his hedge fund, ESL Investments. His offer, however, was deemed insufficient by Sears’ advisors, the people said. One of the biggest unresolved issues was covering the fees and vendor payment it owes, making it “administratively insolvent.” Still, ESL plans to protest Sears’ decision, a person familiar with the situation told CNBC.
Total Retail's Take: The end appears near for one of the country's iconic retail brands, which is sad — and that's before factoring in the thousands of jobs that will be lost. The downfall of Sears has been well documented, with factors such as the company's inability to compete with rising online competition, including Amazon.com, as well as changing shopping habits that saw less of a dependence on brick-and-mortar stores. Sears’ last profitable year was 2010. In fact, it's notable that Sears lasted as long as it did considering its struggles over the past decade. Much of that staying power can be attributed to Lampert's personal stake in the company, as he continually invested money from ESL to keep Sears operational. But in the end Lampert's own missteps — he had never run a retail business before prior to Sears — may be to be blame for the precarious situation Sears was in.