US department store Sears hit news headlines recently, after trying to seek a deal with Edward Lampert for a $4.4 billion takeover. The struggling chain of department stores. Which, at one time, dominated US shopping malls was looking for a deal to recover after losing a vast number of sales. However, it’s now been reported that the deal has collapsed, and the company is now seeking court permission to go forward with liquidation.
Sears Holdings has been a major name in the US for over a century. However, due to the rise in online competition, in particular from giants like Amazon, like other traditional stores, it’s been losing more and more sales. It also owns Kmart, and, in total, has over 68,000 employees. It’s believed that many of its employees could now lose their jobs as a result of the bankruptcy.
Originally, it was announced that Sears would be closing 46 of its most unprofitable retail stores. Now, it’s added another 142 to the list. The bankruptcy proceedings will give the company additional time to pay off its creditors, which it hopes to do by selling some parts of the business.
The company hasn’t made any official statements about the new yet; however, it’s been suggested that certain areas of the business, like home services, could be saved. In a Tweet, Sears commented on its social media page: We may be slowing down, but we are not out of the race just yet. Don’t count us completely out. Happy Shopping!”
Managing director of GlobalData Retail, Neil Saunders, commented: “Reports of Sears headed to liquidation suggest that the much-storied retailer is now at the end of its long road to collapse. Its recent journey to this point has been characterised by incredibly poor strategic decisions, chronic underinvestment and continuous financial machinations designed to keep the company afloat. All of this impacted trading, which has remained dire, making Sears more like a patient in a coma than a fully functioning retailer.”