Sears to close 80 more stores as bankruptcy deadline nears. Could this be the end for the historic retailer?
Customers line up for the re-opening event at a renovated Sears store, Oct. 4, 2018 at Oakbrook Center.(Brian Cassella / Chicago Tribune)
People walk by the Six Corners Sears store at the intersection of Irving Park Road and Cicero and Milwaukee avenues in Chicago on July 13, 2018. The Six Corners location, the last Sears store within the Chicago limits, is set to close in days.(Chris Sweda / Chicago Tribune)
Customers browse the tool section at a renovated Sears store, Oct. 4, 2018, at Oakbrook Center.(Brian Cassella / Chicago Tribune)
The Sears campus on Friday, Oct. 12, 2018 in Hoffman Estates. The campus was once home to the corporations headquarters.(Stacey Wescott / Chicago Tribune)
Shown in a 1992 photo, the 786-acre site north of the Northwest Tollway and west of Illinois Highway 59 in Hoffman Estates would be transformed into the home of the Sears’ Merchandise Group headquarters.(Chris Walker / Chicago Tribune)
Customers browse appliances at a renovated Sears store, Oct. 4, 2018 at Oakbrook Center.(Brian Cassella / Chicago Tribune)
A shopper leavers the Sears North Riverside Park Mall located in North Riverside on Oct. 11, 2018.(Jose M. Osorio / Chicago Tribune)
Sears informed employees in April at its last store in the city, at Six Corners in the Old Irving Park neighborhood in Chicago that it is closing this summer.(Jose M. Osorio / Chicago Tribune)
Customers browse snowblowers at a renovated Sears store, Oct. 4, 2018 at Oakbrook Center.(Brian Cassella / Chicago Tribune)
Small appliances on sale at Sears located at the Woodfield Mall in Schaumburg on Nov. 19, 2015.(Jose M. Osorio / Chicago Tribune)
Customers browse apparel at a renovated Sears store, Oct. 4, 2018 at Oakbrook Center.(Brian Cassella / Chicago Tribune)
Carl Burson Jr. carries a billboard and distributes flyers as people are making last minute shopping stops at the Sears store on North State Street in Chicago. The store closed on March 31, 2014.(Zbigniew Bzdak / Chicago Tribune)
Sears mechanic Mike Atamian removes a tire from its rim at the Sears Auto Center at Woodfield Mall on May 11, 2018. Amazon and Sears began working together on tires sales and installation. Customers who buy tires through Amazon can now have them shipped to Sears and Sears Auto Center will install them.(Stacey Wescott / Chicago Tribune)
Salesman Lenny Vertucci shows a lawn mower at the Sears store in Oakbrook shopping center to Henry Furlanetto of Hodgkins on March 1, 1989.(John Dziekan / Chicago Tribune)
Robert Rosenthal, of Kildeer, left, and friend Jan-Michael Wyckoff, of Schaumburg,pick up the last catalogs for Sears Roebuck and Co. at Woodfield Mall in Schaumburg on Jan. 26, 1993. The company announced massive cutbacks, including the catalog.(Chuck Berman / Chicago Tribune)
Pedestrians walk past the Sears department store, Dec. 6, 2013, on North State Street in Chicago. Company officials said they will spin off Sears’ Lands’ End clothing business.(Anthony Souffle / Chicago Tribune)
An R.R. Donnelley worker prepares the Sears apparel catalog for mailing on December 28, 1988.(Don Casper / Chicago Tribune)
People shop at the Sears store at the Hawthorn Shopping Center in Vernon Hills on July 22, 1983.(Phil Greer / Chicago Tribune)
Visitors tour the 14 story tower from the former Sears, Roebuck & Co.’s headquarters during the Chicago Architecture Foundation’s Open House Chicago, Oct. 17, 2015.(Antonio Perez / Chicago Tribune)
The longtime Sears Lawrence Avenue store in the Lincoln Square neighborhood closed its doors in August 2016. The store was the oldest Sears retail store left in Chicago, but the corporate ax fell in May.(Phil Velasquez / Chicago Tribune)
At the Sears Roebuck and Co. store in Aurora, customer Tabb Wierengo uses an electronic kiosk for financial service information on June 20, 1985. Experts say electronic shopping is the wave of the future, but that it will take time to reach the consumer.(Sally Good / Chicago Tribune)
The Sears Tower, the tallest building in the United States, is officially renamed the Willis Tower on, July 16, 2009, in Chicago.(Chris Walker / Chicago Tribune)
The Sears’ State Street store looking from Congress toward Van Buren during the early evening on Oct. 29, 1982.(Quentin C. Dodt / Chicago Tribune)
People wait to get into the remodeled Sears store at State Street and Congress on April 11, 1978.(Frank Hanes / Chicago Tribune)
The machine in this photo is one of the 36 robots that carry mail around the Sears Tower. Self-operating and running on battery power, the robot follows an invisible flurorescent trail applied to the carpeting. It makes periodic 20-second stopsso that Sears secretaries along the way can pick up and deposit mail. It was designed by the same group who helped build the Lunar Rover, Lear Siegler, Inc.(Ovie Carter / Chicago Tribune)
Stockholders watch as Sears Roebuck & Co. former chairman Arthur M. Wood reports and 81 percent rise in net profits for the first quarter of 1977.(Ernie Cox Jr. / Chicago Tribune)
Estella Barnes, left, and Marjorie Kimmel, rear, re-tag apparel as Lola Snyder checks merchandise at Sears in the River Oaks Center in February 1989 as Sears converted to “every day low prices”.(Walter Neal / Chicago Tribune)
An employee from the Sears Service Center works on fixing an appliance at the Sears Service Center in Deerfield in January 1983.(Frank Hanes / Chicago Tribune)
People pass by the catalog sales section of Sears in Schaumburg, circa Jan. 25, 1993. Competitors are going after the Sears catalog business.(Jim Prisching / Chicago Tribune)
Shoppers at Sears on Dec. 21. 2017, in West Dundee.(Stacey Wescott / Chicago Tribune)
Exterior of the Sears Tower, Aug. 8, 2007, while the Tower searches for tenants to fill their vacant spaces. Later, the building would be renamed Willis Tower.(Candice C. Cusic / Chicago Tribune)
A welder works near the top of the 110-story Sears Tower on April 13, 1973.(William Yates / Chicago Tribune)
Sears is closing 80 more stores, including five Kmarts in California, as it nears a deadline that could determine whether the bankrupt retailer lands a lifeline to save its business or is forced to begin shutting down.
Sears Holdings Corp. said it notified workers at the closing Sears and Kmarts on Thursday. In California, no additional Sears stores are slated for closure. The five Kmart stores are in Burbank, Apple Valley, Santa Maria and Stockton.
Sears, based in Hoffman Estates, Ill., already had announced plans to shutter 182 stores after seeking Chapter 11 bankruptcy protection in October. The latest round of stores will close in March and liquidation sales are expected to begin in two weeks, Sears said Friday.
News of the closures came hours ahead of a deadline for parties interested in acquiring the retailer’s assets to submit bids, according to a timeline approved by the Bankruptcy Court.
Earlier this month, ESL, the hedge fund run by Sears Chairman Edward Lampert, said it would offer about $4.6 billion for many of the retailer’s remaining assets, including about 500 Sears and Kmart stores and its well-known Kenmore and DieHard brands.
That proposal would keep Sears in business and preserve “tens of thousands of jobs,” Lampert’s hedge fund said in a letter to Sears’ investment banker earlier this month.
ESL made its offer late Friday, according to multiple media reports, all citing unnamed people familiar with the matter.
ESL’s brinksmanship “suggests lenders are … skittish about whether it really is viable as a going concern,” said Craig Barbarosh, a partner at law firm Katten Muchin Rosenman who is not involved with the Sears case.
Sears told the court it has seen interest from multiple parties, including some who would liquidate the company, according to a CNN report.
The company and its restructuring adviser declined to comment Friday on any bids it may have received.
Sears could choose to extend the deadline it set to give potential bidders more time to finalize plans or secure financing.
Even if ESL does submit a formal offer to buy the business with the intent of keeping it in operation, it doesn’t guarantee Sears would escape liquidation.
The court will choose the bid that recovers as much of the money Sears owes its lenders and vendors as possible, whether that means shutting the business down immediately or giving Sears more time to restructure, Barbarosh said.
If it’s a close call, judges tend to lean to bids that would keep the business going because that preserves jobs, said Barbarosh. ESL said it expected to employ 50,000 at the 500 stores it proposed acquiring, out of 68,000 employees Sears said it had at the time of its bankruptcy filing.
A bid that would keep Sears in business also gives lenders who aren’t first in line to be repaid a shot at retrieving a larger portion of what they’re owed.
“But if lenders can make an argument that there will be greater returns (from shutting down quickly), I would not be surprised if they liquidate,” Barbarosh said.
At the time of its bankruptcy filing, Sears said it had 687 stores and 68,000 employees, 32,000 of whom are full-time.
Zumbach writes for the Chicago Tribune.