[ad_1]
Sears, the famous American retailer who died, reportedly hired a consulting firm to prepare a bankruptcy filing.
The filing could take place this week in anticipation of the company's $ 134 million debt payment, due Monday, the Wall Street Journal. reported. New York-based specialist consulting firm M-III Partners has spent the last few weeks in the rankings, the Journal reported. Nevertheless, the possibility of Sears disappearing has been around for months and people familiar with this arrangement told the Journal that Sears was still thinking about other options. Neither Sears nor the M-III partners have returned requests for comments.
Sears shares fell more than 36% Wednesday at noon.
The 125-year-old retailer was particularly hard hit, as physical stores struggled to keep gigantic exhibition halls and compete with e-commerce giants. But if Sears is now in contact with the banks to get the funding needed to file a bankruptcy, as CNBC reported Wednesday morning, this could send the surest signal to date, however, that a such an approach may not be so remote.
On Tuesday, Sears also called on Alan Carr, a restructuring expert, as a company director, which brought the six-person board of directors to seven and added additional guidance on how to lead. a big company through a bankruptcy process.
[The big missteps that brought an American retail icon to the edge of collapse]
Just weeks ago, Sears CEO Eddie Lampert came up with a last-minute plan to save the retailer. The company has a total outstanding of $ 5.6 billion and now has only 820 Sears and Kmart stores. When Lampert took over the company five years ago, there were 2,000 stories. Lampert bought Sears in 2004 and merged it with Kmart, in which he had a majority stake the following year.
Lampert, Sears' largest shareholder and creditor, and owner of hedge funds ESL Investments, last month asked its creditors to refinance $ 1.1 billion of debt before payment on Oct. 15, according to a document filed by the Securities and Exchange Commission. Exchange Commission of the United States. He also called on the company to sell $ 3.25 billion in real estate and assets. These include Sears Home Services and the company's flagship brand Kenmore, which Lampert offered to purchase in August for $ 400 million.
Lampert himself had a controversial mandate as general manager. Sears' online presence was a focus of concern, but physical store maintenance has decreased. Lampert's strategy has often been to keep Sears afloat with loans.
In the September SEC report, Lampert's hedge fund said it "must act immediately to have enough lane to continue its transformation" if Sears could make a turnaround.
Matt Kopsky, an analyst at Edward Jones, noted that Sears has not made any profit since 2010 and has sold most of its brands, including Craftsman tools and Kenmore devices. The company owns about half of its real estate and has sold most of its most valuable assets. The other half is rented and the restructuring of the rents of these stores would allow for little savings because Sears already pays well below market rents.
If Sears were to close out, the remaining stores – averaging about 140,000 square feet – would flood the market with "a lot of empty boxes," Kopsky said. This type of liquidation would be particularly difficult for lower-level shopping centers and shopping centers that have difficulty finding tenants in low-demand areas.
Kopsky attributed the falling stock price of Sears to that of Wall Street during an imminent bankruptcy. The JCPenney, Kohl's and Bed Bath & Beyond share prices were up at noon on Wednesday, which Kopsky says indicates the market is confident that Sears will declare bankruptcy and that retailers will benefit in the near term.
Larry Perkins, founder and CEO of SierraConstellation Partners, a firm that advises companies in bankruptcy and other transitions, said Sears' hiring of bankruptcy advisors "is not a sure sign, but that he is certainly an advanced indicator "
"It's literally years that the moving train wreck is the slowest," Perkins said.
Typically, when hiring advisors, a company evaluates various alternatives, including other restructuring plans or the sale of assets. However, even though Sears seems on the verge of "inevitably concluding," Perkins said his final demise would set a precedent for an iconic American brand that has fallen from the pinnacle of retail dominance.
"It's sad, it's really sad to see the end of an era," said Perkins. "Maybe it's the phoenix rising from the ashes, but we'll see."
[ad_2]
Source link
