Sears Holdings has emerged from bankruptcy after more than 10,000 lawsuits and a four-year stint that has seen the department store chain shrink from nearly 700 stores to fewer than two dozen.
The bankruptcy estate’s reorganization plan went into effect Oct. 29, signaling an end to Chapter 11 and the beginning of liquidation proceedings for its remaining assets.
Sears Holdings is a shell company. It sold its operations to ESL Investments, a subsidiary of former Sears chairman Eddie Lampert, in February 2019. The $5.2 billion sale included more than 400 retail locations.
Ray Wimer, a professor of retail practice at Syracuse University, doesn’t expect the remaining 20+ Sears stores to survive from this sale. “They don’t offer customers an attractive value proposition, and the competition in the retail market that offers similar goods means the end will come eventually,” he told FOX Business.
Where America Shopped
Sears once advertised as “Where America Shops,” boasting lines of merchandise from supermodel Cheryl Tiegs and Charlie’s Angels star Jaclyn Smith.
At its peak, Sears, Roebuck was the world’s largest retailer with nearly 3,500 Sears and Kmart locations, including 2,350 full-line and off-mall stores, and 1,100 specialty retail stores. Sears also had a portfolio of well-known brands and operating companies, including Kenmore, DieHard, Craftsman, Sears Home Services, Sears Auto Centers, and Innovel.
Competitor Walmart had just over 3,000 branches: 1,353 discounters and 1,713 supercenters.
Lampert, then chairman of Kmart Holdings, bought Sears for $11 billion in March 2005 to fend off brick-and-mortar competitors like Walmart and e-commerce competitors like Amazon.
At the time of the merger, the Sears-Kmart combination, called Transformco, had annual sales of $55 billion, one-fifth of Walmart’s total sales of $256 billion in 2004.
Amazon had annual sales of $2.54 billion. Since then, the world’s largest online retailer has grown to $469.8 billion in sales, while Walmart ended 2021 with $572.8 billion. Transformco is private and does not report financial results.
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Sears attempted to stave off bankruptcy by closing stores and selling assets. Sears sold its Craftsman brand to Stanley Black & Decker for $775 million in 2017 and closed 300 stores in 2018.
It wasn’t enough.
The company went bankrupt in October 2018 with 687 stores. Like many stationary retailers, the department store also suffered from declining sales. Revenues fell 53.8% in the five years before bankruptcy, prompting some vendors to demand unfavorable payment schedules, cut subsidies or require prepayment as a condition of continued delivery of goods.
Lampert bought Sears’ remaining assets in a bankruptcy auction in January 2019, acquiring Sears Hometown and Outlet Stores in June. In December 2019, he sold DieHard to Advance Auto for $200 million.
Transformco continued to sell out stores, closing the last 15 Sears Auto Center locations in January.
Professor Wimer says based on what he has seen he expects the Sears stores to die a slow death and notes that it is unlikely anyone would be interested in buying any Sears assets if Lampert would be interested in selling given the small footprint remaining stores.
According to BroStocks and the Sears website, there are now fewer than two dozen Sears stores, excluding smaller hometown stores.
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Surviving Sears stores:
- Alaska: Anchorage (Home & Life)
- California: Burbank, Concord, Stockton, Whittier
- Colorado: Fort Collins (Device & Mattress)
- Florida: Miami, Orlando, Palm Beach Gardens
- Hawaii: Honolulu (Equipment & Mattress)
- Kansas: Overland Park (House & Life)
- Louisiana: Lafayette (Home & Life)
- Maryland: Frederick
- Massachusetts: Braintree
- New Jersey: Jersey City
- North Carolina: Greensboro
- Pennsylvania: Camp Hill
- Puerto Rico: San Juan
- Texas: El Paso, Pharr (Appliances & Mattress)
- Washington: Tukwila, Union Gap