The Washington Post just issued a report, citing "a person familiar with the negotiations" saying Sears, which has been closing Sears and K-Mart stores right and left for the past few years, will file for Chapter 11 bankruptcy today and close 150 stores immediately.
The article does not mention which stores will be affected and whether the closings will affect the Sears anchor store at Joplin's Northpark Mall.
The company faced a Monday deadline to make a $134 million debt payment and did not have the funds.
The company's official news release is printed below:
Sears Holdings Corporation ("Holdings," "we," "our," or the "Company") (NASDAQ: SHLD) today announced a series of actions to position the Company to establish a sustainable capital structure, continue streamlining its operating model and grow profitably for the long term. To facilitate these actions, the Company and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York (the "Court").
s and services to members and customers. Holdings' services and brand businesses will also continue to operate as usual. Customers should expect Holdings' loyalty programs, including the Shop Your Way membership program, and the Sears and private label credit card rewards programs, to continue as normal.
The Company is committed to working with its vendors and other partners to help maintain inventory levels and ensure timely product delivery.
"Over the last several years, we have worked hard to transform our business and unlock the value of our assets," said Edward S. Lampert, Chairman of Sears Holdings. "While we have made progress, the plan has yet to deliver the results we have desired, and addressing the Company's immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer.
"The Chapter 11 process will give Holdings the flexibility to strengthen its balance sheet, enabling the Company to accelerate its strategic transformation, continue right sizing its operating model, and return to profitability. Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debtholders, and be better positioned to execute on our strategy and key priorities."
Lampert continued, "As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers. We thank our vendors for their continuing support through the upcoming season and beyond. We also thank our associates for their hard work and commitment to providing millions of Americans with value and convenience."
Strategic Actions
Holdings intends to reorganize around a smaller store platform of EBITDA-positive stores. The Company believes that a successful reorganization will save the Company and the jobs of tens of thousands of store associates.
Holdings is currently in discussions with ESL regarding a stalking-horse bid for the purchase of a large portion of the Company's store base. There can be no assurance that any transaction will be consummated or on what terms any transaction may occur. Additionally, Holdings expects to market and sell certain of the Company's assets over the coming months.
Holdings will also close 142 unprofitable stores near the end of the year. Liquidation sales at these stores are expected to begin shortly. This is in addition to the previously announced closure of 46 unprofitable stores that is expected to be completed by November 2018.
Leadership and Board Changes
Holdings has enacted a series of leadership and Board changes in support of the continued transformation and restructuring process:
- CEO Transition: Edward S. Lampert has stepped down from his role as Chief Executive Officer of the Company, effective immediately. He will remain Chairman of the Board. The Company's Board has created an Office of the CEO, which will be responsible for managing the Company's day-to-day operations during this process. The Office of the CEO will be composed of Robert A. Riecker, Chief Financial Officer; Leena Munjal, Chief Digital Officer, Customer Experience and Integrated Retail; and Gregory Ladley, President of Apparel and Footwear.
- Formation of Restructuring Committee: The Board has formed a special committee (the "Restructuring Committee") that will oversee the restructuring process and have decision making authority with respect to transactions involving affiliated parties. The Restructuring Committee consists solely of independent directors and includes Alan J. Carr, Paul G. DePodesta, Ann N. Reese and William L. Transier.
- Appointment of Chief Restructuring Officer: Mohsin Y. Meghji, Managing Partner of M-III Partners, has been appointed Chief Restructuring Officer. Meghji is a nationally recognized U.S. turnaround professional with a track record of revitalizing companies experiencing financial, operational or strategic transitions to maximize value for stakeholders. He has joined the Company's senior management team and will help lead the Company's restructuring efforts, reporting to the Restructuring Committee.
- Addition of New Independent Director:William L. Transier, Chief Executive Officer of Transier Advisors LLC, has joined Holdings' Board as an independent director. In addition to his leadership roles at public companies, Transier has extensive restructuring experience involving companies with complex capital structures and has served on special committees of independent directors responsible for overseeing restructuring processes. This appointment follows the recent addition of Alan J. Carr to the Board.
Additional Information about the Restructuring Process
Additional information is available on the Company's restructuring website at restructuring.searsholdings.com. For Court filings and other documents related to the court-supervised process, please visit http://restructuring.primeclerk.com/sears, call (844) 384-4460 (for toll-free domestic calls) and +1 (929) 955-2419 (for tolled international calls), or email searsinfo@primeclerk.com.
Advisors
Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard Frères & Co. LLC is serving as investment banker to Holdings.
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