Retailing Icon Sears on Verge of Bankruptcy
Another retailing icon appears to be edging toward a bankruptcy filing. Sears, one of the most recognized names in American retailing, is expected to file a business bankruptcy petition. The decline of Sears appears to be the result of a changing retail climate in the country and a serious of questionable management decisions.
Sears, Roebuck & Co. was founded shortly after the Civil War, and it soon became known as the go-to-for-everything store. Its huge Christmas catalogs were part of many families’ holiday traditions, but the store’s inability to compete with large box retailers, such as Wal-Mart, and online marketers, such as Amazon, caused management to sell off a number of profitable brands, such as Craftsman tools and Land’s End. Over the last five years, Sears has lost about $5.8 billion; over the last decade, the company has closed a thousand stores. The company is currently searching for interim financing of approximately $500 million that will allow it to survive until the end of 2018.
Some observers blame Edward S. Lampert, the company’s current CEO, for the company’s poor performance and impending bankruptcy. Lampert is a former hedge fund manager who became Sears CEO in 2005 with no experience in retailing. Since then, he has sold off a number of successful brands to companies in which he already owned a controlling share. Many of those companies have become very successful on their own. A measure of the company’s downfall is the price of its shares. In 2007, one share of the company’s stock was worth $120; on October 12, it closed at 40.7 cents.
Like many bankruptcies, the demise of Sears cannot be blamed on a single factor. Many businesses fail for a variety of reasons. Anyone who is concerned about the fate of a business may wish to consult an experienced bankruptcy attorney for advice on whether bankruptcy can help the business stay afloat or whether it should be dissolved.