Sears emerges from bankruptcy, a handful of stores remain
Sears Holdings emerged from bankruptcy after more than 10,000 court filings and a four-year suspension that saw the department store chain drop from nearly 700 stores to less than two dozen.
The bankruptcy estate’s reorganization plan went into effect Oct. 29, signaling the end of Chapter 11 and the start of a liquidation process for its remaining assets.
Sears Holdings is a front company. It sold its stores in February 2019 to ESL Investments, a subsidiary of former Sears chairman Eddie Lampert. The $5.2 billion sale included more than 400 outlets.
Syracuse University retail professor Ray Wimer doesn’t expect the remaining 20+ Sears stores in this sale to survive. “They don’t have an attractive value proposition for customers and the degree of competition in the retail market with similar products means the end will come at some point,” he told FOX Business.
Where America shopped
Sears once advertised itself as “Where America Shops” and boasted merchandise lines from model Cheryl Tiegs and “Charlie’s Angel’s” star Jaclyn Smith.
At its peak, Sears, Roebuck was the largest retailer in the world, with nearly 3,500 Sears and Kmart stores, including 2,350 full and non-mall stores and 1,100 specialty retail stores. Sears also had a portfolio of leading brands and operating businesses, including Kenmore, DieHard, Craftsman, Sears Home Services, Sears Auto Centers and Innovel.
Competitor Walmart had just over 3,000 stores: 1,353 discount stores and 1,713 Supercenters.
Lampert, then chairman of Kmart Holding, bought Sears for $11 billion in March 2005 in an effort to fend off physical competitors such as Walmart and e-commerce rivals such as Amazon.
At the time of the merger, the Sears-Kmart combo, called Transformco, had annual revenues of $55 billion, one-fifth of Walmart’s $256 billion total for fiscal 2004.
Amazon had annual revenue of $2.54 billion. Since then, the world’s largest online retailer hit $469.8 billion in sales while Walmart ended 2021 at $572.8 billion. Transformco is privately held and does not publish financial results.
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Sears tried to avoid bankruptcy by closing stores and selling assets. Sears sold its Craftsman brand to Stanley Black & Decker in 2017 for $775 million and closed 300 stores in 2018.
It wasn’t enough.
The company went bankrupt in October 2018 with 687 stores. Like many brick-and-mortar retailers, the department store has been a victim of declining sales. Revenues plummeted 53.8% in the five years before bankruptcy, prompting some suppliers to demand unfavorable payment schedules, cut subsidies or demand upfront payment as a condition for lawsuit of the delivery of the goods.
Lampert purchased Sears’ remaining assets at a January 2019 bankruptcy auction and acquired Sears Hometown and Outlet Stores in June. He sold DieHard to Advance Auto for $200 million in December 2019.
Transformco continued to sell stores and closed the last 15 Sears Auto Center locations in January.
Professor Wimer says, based on what he has seen, he expects Sears stores to die slowly, noting that it is unlikely anyone will be interested in buying any of Sears’ assets. Sears, if Lampert was interested in selling, given the small footprint of the remaining stores.
There are now fewer than two dozen Sears stores, excluding smaller-format Hometown stores, according to BroStocks and the Sears website.
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Surviving Sears stores:
- Alaska: Anchorage (home and life)
- California: Burbank, Concord, Stockton, Whittier
- Colorado: Fort Collins (appliances and mattresses)
- Florida: Miami, Orlando, Palm Beach Gardens
- Hawaii: Honolulu (appliances and mattresses)
- Kansas: Overland Park (home and life)
- Louisiana: Lafayette (home and life)
- Maryland: Frederick
- Massachusetts: Braintree
- New Jersey: Jersey City
- North Carolina: Greensboro
- Pennsylvania: Camp Hill
- Puerto Rico: San Juan
- Texas: El Paso, Pharr (appliances and mattresses)
- Washington: Tukwila, Union Gap