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Sears is out of the game of bankruptcy; The big loss of Big Mac in Europe
Fox Business Briefs: Sears has another chance after its chairman and major shareholder wins an auction of bankruptcy; McDonald's is losing the "Big Mac" brand battle against Supermac's Irish fast food chain after the European Union judge ruled against the mega American company.
The bankrupt Sears retailer, recently re-elected by its current president and former CEO, Eddie Lampert, faces a number of challenges to return to profitability, which could spur competitors and help some shopping centers.
Moody's Investors Services is unconvinced that this once-iconic retailer could be successful in its turnaround, saying it remains convinced that the retailer may need to remove more stores or even liquidate.
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A number of retail rivals could benefit from Sears' continued reduction in environmental footprint. Among these are Macy's, J.C. Penney and Dillard's, which Moody's rating all have overlapping locations with Sears and are therefore ready to attract potential customers. Of these potential recipients, Macy's is the department store with the highest upside potential, with over a quarter of its stores located in a location with a Sears location. Although J.C. Penney has the largest number of overlaps, he also has more locations that coexist in less prosperous malls.
The company cited the liquidation of Bon-Ton, which had similarly boosted sales at Macy's and Kohl's, as a model for the Sears situation.
Sears has already reduced its number of stores by approximately 70% since January 2017.
Moody's said the potential for additional closures at Sears stores could negatively impact lower-level stores. The researchers note that successful shopping centers will find it easier to find tenants to fill the vacant space.
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Earlier this month, Sears accepted a $ 5.2 billion offer from Lampert's hedge fund, ESL Investments, to prevent the department store from going into liquidation. The agreement, which still requires the approval of a bankruptcy court, is expected to keep about 400 stores open and maintain up to 50,000 jobs.
As previously reported by FOX Business, the retailer is facing a difficult path if the Lampert deal is approved by a court. Sears' very small number of stores presents a number of distinct challenges, including its impact on its ability to attract a core customer, its ability to compete with rivals, and other challenges related to its reorganization process.
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