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Sears staves off liquidation, will remain in business; local store still to close
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Customers enter Sears in Lakeshore Mall on Friday, Jan. 4, 2019. This Sears location is set to close in late March, which will bring an end to the department store's history in Hall County. - photo by Austin Steele

NEW YORK — Sears will live on — at least for now.

The company’s chairman and largest shareholder, Eddie Lampert, won a bankruptcy auction for Sears, averting liquidation of the iconic chain, according to a source familiar with the negotiations. The person agreed to speak on condition of anonymity because they were not authorized to discuss the negotiation publicly.

Lampert, who steered the company into Chapter 11 bankruptcy protection in October, is aiming to keep open roughly 400 stores and preserve tens of thousands of jobs.

But how long Sears can survive under the 56-year-old billionaire, who has tried and failed to turn around the company many times before, remains an open question. Cutthroat competitors like Amazon, Target and Walmart also pose challenges that the struggling retailer has so far been unable to overcome.

The Sears at Lakeshore Mall in Gainesville is set to close in late March, which will bring an end to the department store’s history in Hall County.

“While there’s no doubt that a shrunken Sears will be more viable than the larger entity, which struggled to turn a profit, we remain extremely pessimistic about the chain’s future,” said Neil Saunders, managing director of GlobalData Retail. “In our view, Sears exits this process with almost as many problems as it had when it entered bankruptcy protection. In essence, its hand has not changed, and the cards it holds are not winning ones.”

The operator of Sears and Kmart had 687 stores and 68,000 workers at the time of its bankruptcy filing. At its peak in 2012, its stores numbered 4,000.

Lampert, the only one to put out a bid for the whole company, had sweetened his offer to more than $5 billion over the last few days through an affiliate of his hedge fund ESL after his original bid had been rejected by the Sears board. That included assuming certain liabilities like covering bills to vendors of up to $166 million. Details of the final terms couldn’t be learned.

The plan is not a done deal and must be approved at a hearing on Feb. 1 by a bankruptcy judge in White Plains, New York.

Lampert, who gave up the CEO title when the Sears filed for Chapter 11, has maintained there’s still potential for the company. But he has yet to spell out details on how he plans to turn it around.

Lampert combined Sears with Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. He pledged to return Sears to greatness, but that never happened.

The company, hammered during the recession and outmatched in its aftermath by shifting consumer trends and strong rivals, hasn’t had a profitable year since 2010 and has suffered 11 straight years of annual sales declines. Lampert has been criticized for not investing in the stores.


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