A change in ownership has not stopped the bleeding at Sears. The retailer, acquired by a firm controlled by former CEO Eddie Lampert in February, says it is closing 100 more Sears and Kmart stores.
That’s in addition to the nearly two dozen Sears and Kmart stores already targeted for closing next month. And of course, it follows the shuttering of hundreds of Sears and Kmart stores over the last five years as the venerable retailer struggled against a rising sea of red ink.
At the time, ESL Investments, headed by Lampert, purchased Sears’ remaining assets the company announced that it would retain only about 400 Sears and Kmart stores. It isn’t clear from the announcement whether the 100 set for closing are part of that 400 or had already been designated for elimination at the time of the purchase.
Sears Holdings, the former owner of the brand, filed for bankruptcy protection 11 months ago. It pointed to steep declines in business lost to online shopping channels and rising debt. The following months were marked by a bitter struggle to control the company’s future, with Lampert’s hedge fund emerging as the high bidder.
Opposition to selling to Lampert
Even so, board members and vendors strongly opposed the sale to Lampert, suggesting his leadership as CEO had put the company in its predicament. In making his argument for ownership, Lampert said he could at least preserve some of the stores while saving approximately 68,000 jobs.
Even after the sale was completed, there were lawsuits. The Sears Holdings’ team that was given the responsibility of disposing of Sears’ assets sued Lampert in April, alleging that Lampert destroyed billions of dollars of Sears’ value and drove the company into bankruptcy.
Lampert defended his actions as CEO, saying he was forced to sell assets in a vain attempt to pull Sears out of what he called its “death spiral.” But Sears Holdings, which filed the suit, charges Lampert in effect “gave away the store” in deals that failed to realize the full value of the assets he was selling.
The following month, the new Sears sued the old Sears, claiming that what’s left of the old company -- the Sears estate -- has failed to turn over "hundreds of millions of dollars of assets" called for by the sales agreement.
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