Retail Icon Sears Hires Adviser for Bankruptcy Filing

Mae Love
October 11, 2018

Lampert divided the expanded company into dozens of units that competed for resources.

Business Insider reported on Wednesday that Sears' top spokesman, Chris Brathwaite, jumped ship just days ago after more than a decade working at the company. It still has nearly 900 stores, and its stocks bounced upward previous year when the retailer announced a partnership with Amazon to install auto tires bought online. The company has a total of about $5.6 billion in outstanding debt and is down to about 820 Sears and Kmart stores.

"I don't think it is an immediate drive to bankruptcy, but clearly the options are limited", said David Tawil, president and co-founder of Maglan Capital, which follows distressed companies.

Sears shares were down 31 per cent at 40.5 cents in afternoon trading in NY, giving the company a market capitalization of $40 million. Sears's poor performance has always been an issue for owners, but landlords are split between those that are likely cheering the possibility of reclaiming its locations for more profitable tenants and those that see its potential bankruptcy as a negative tipping point. But if Sears is now in touch with banks to secure the financing needed for a bankruptcy filing, as CNBC reported Wednesday morning, that could send the surest signal that such a move may not be so far off.

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Sears (SHLD) announced Tuesday that it hired Alan Carr as an independent director.

But the retail landscape is littered with out-of-business brands that tried to reorganize in the bankruptcy process and liquidated their businesses instead.

Sears was at one point America's largest retailer and its largest employer. Toys "R" Us' creditors lost faith in the retailer after revenue during last year's holiday season failed to meet their expectations. The company recently announced another 46 store closings that will take place just before the start of the holiday shopping period.

If Sears were to file for bankruptcy, its financial performance during the upcoming holiday season could prove crucial in determining its future, according to the sources.

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