100 of the 425 Sears and Kmart stores that financier Edward Lampert acquired out of bankruptcy are set to close by year-end…
from Zero Hedge
A new report by The Wall Street Journal indicates about 100 of the 425 Sears and Kmart stores that financier Edward Lampert acquired out of bankruptcy are set to close by year-end.
Lampert, who was chairman and chief executive of parent Sears Holdings Corp., decided in late 2018 to file for bankruptcy protection.
Lampert provided the parent company with numerous financing deals, one was upwards of $2.4 billion, to save the sinking retailer.
Earlier this year, he acquired 223 Sears and 202 Kmart stores, the Kenmore and DieHard brands, for approximately $5.2 billion.
The newly acquired assets were put into a new company called Transform Holdco LLC, which didn’t have $4 billion in debt and pension obligations that the parent company had. About 50% of the stores in the new company were profitable, according to one of The Journal’s sources.
The sources said by late summer, the profitability of at least 100 of the 425 stores owned by Transform Holdco saw rapid deterioration by late summer. Sources said the decision to cut 100 stores by year-end isn’t public knowledge yet, there are no filings that detail the plan.
Sears has been crushed by e-commerce competition, along with other brick-and-mortar competition like Home Depot, Lowe’s and Best Buy.
Market research company TraQline said Sears’ dollar share of large appliances dropped to 11% in June from 23% four years earlier.
Sears has struggled to reacquire suppliers after the bankruptcy proceedings, leaving many of its store shelves empty, and consumers disappointed with the selection.
As for the overall retail trend, our report from last month specified how 2019 store closures already outpaced all of 2018.