After all, at mid-week, their company Sears Holdings petitioned a bankruptcy judge to let it close its remaining stores and liquidate its assets, saying former CEO Eddie Lampert’s $4.4 billion offer to buy the remaining assets wasn’t good enough.
But Lampert has raised his bid to $5 billion, and the judge said the former executive can bid for the assets in Monday’s bankruptcy audition. In a filing, Lampert’s hedge fund, ESL Investments, said it has formed a new company called Transform Holdco LLC that will make a new offer to buy the company’s assets and operate its most profitable retail stores.
In the filing, Lampert said he is still enthusiastic about the deal and about Sears’ future in the retail space. Whether the new company’s offer is sufficient will be determined at Monday’s auction.
Lampert’s new company appears to be the only bidder that wants to keep Sears intact, and thus preserve most of the existing jobs. It will have to compete with others bidding for pieces of the firm.
At stake is the legacy of a retailer that began in the late 19th century, as well as the fate of as Sears and Kmart employees who would lose their jobs if the company eventually liquidates.
In recent years, the company operating Sears and Kmart stores 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.
Its efforts at a turnaround have encountered two strong counter-trends. On one hand, more retail sales have moved to online channels in the last decade. Even as Sears’ brick and mortar competitors established effective e-commerce operations, Sears -- a pioneer in catalog sales -- failed to do so.
It has also been a victim of the decline of shopping malls. While competitors such as Walmart and Target usually operate stand-alone stores, Sears has usually been an anchor in shopping malls, which have seen dramatic declines in customer traffic.
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