PhotoSears, the 126-year-old bankrupt retailer, isn’t dead after all.

After hearing both sides, a bankruptcy judge has decided to postpone Sears’ requested liquidation to allow former Sears CEO Eddie Lampert one final chance to take over the company and its remaining 425 Sears and Kmart stores.

Lampert, through his hedge fund ESL, bid $4.4 billion for the company’s assets, but the total fell short of what the Sears board said was necessary. The judge ruled that if ESL comes up with $120 million by 4:00 p.m. ET today to keep the stores open, he can compete for the company’s assets at an auction on Monday.

At stake is the legacy of a retailer that began in the late 19th century, as well as the fate of as many as 68,000 Sears and Kmart employees who would lose their jobs if the company eventually liquidates.

The company has been dragged lower both by falling sales and rising debt. The company borrowed heavily in the last decade to shore up its business, but most of those investments failed to bear fruit.

Slow collapse

Sears and Kmart have been undergoing a slow collapse over the last decade as more retail sales have moved to online channels. Even as Sears’ brick and mortar competitors established effective e-commerce operations Sears -- a pioneer in catalog sales -- failed to do so.

The hemorrhaging picked up speed in the third quarter of 2016 when the company reported a net loss of $748 million, almost double what it lost in the same quarter a year earlier. The company responded by closing unprofitable stores.

The only problem was, there were a lot of them. At one point the following year, it opened one new store but closed 20 others. Store closings continued throughout 2017 and 2018, with Sears Holdings declaring bankruptcy in mid-October 2018.

Reuters reports the negotiations between Lampert and the company broke down over the structure of his bid, as well as the former CEO’s request to not be held liable for actions he took while servicing as the company’s chief executive.

Sears, Roebuck, and Company began as a mail order retail company, the late 19th century’s version of Amazon.com. It began opening retail stores in 1925.

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