January 11, 2019
After a years-long death-watch marked by steadily declining sales, mounting losses and hundreds of store closures, it could end as soon as this coming Monday for Sears. Or not.
A bankruptcy auction has been scheduled for Monday by the federal judge presiding over the Sears Holdings case in White Plains, NY. Sears CEO Eddie Lampert and his ESL Investments hedge fund may be in the running with a revised bid, reportedly sweetened to $5 billion from the $4.4 billion Lampert proposed last month.
Reuters reported that Lampert’s revised offer proposes the assumption of about $300 million in tax and merchandise expenses that Sears has incurred since its Oct. 15, 2018 bankruptcy filing, along with $350 million in other expenses.
Absent Lampert’s bid to keep the 126-year-old in business, albeit in scaled-back form, the likely outcome of Monday’s auction would be liquidation or a piecemeal sell-off, reported Reuters.
Which may happen anyway, observed a Seeking Alpha correspondent, who writes under the name WYCO Researcher. Writing about a new agreement that will allow Lampert to participate in Monday’s auction, he wrote, “it seems that Sears is seriously considering to close all stores because the agreement also includes a change to the store-closing motion from a 10-day period to seven days. If they decide to close the stores, they want to do it as soon as possible after the decision is made.”
Whether the bid is worth pursuing is another matter. Industry observers have long wondered how long Sears, which has posted quarterly losses for years, can hang on.
Count Sarah Halzack in that number. “This just feels like an act of desperation,” Halzack, a Bloomberg News writer covering the retail sector, wrote when Lampert’s revised bid was announced. “In the end, even if Lampert wins the auction, I can’t conjure up a realistic sequence of events by which he turns Sears into a thriving retailer again. It’s not keeping pace in the e-commerce wars, and its stores are decrepit.”
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