Retail Icon Sears Hires Adviser for Bankruptcy Filing

Retail Icon Sears Hires Adviser for Bankruptcy Filing

Talks are under way to arrange debtor-in-possession financing for a bankruptcy filing that could come in the next few days, the sources added.

Sears' and Kmart's chairman, chief executive, largest shareholder and biggest creditor - reportedly is looking for a larger restructuring than just anteing up more cash to bail out the cash-strapped retailers. He also called on the company to sell off $3.25 billion in real estate and assets. Sears, meanwhile, continues to evaluate other options that could still avert a trip to Bankruptcy Court.

Shares of Sears (SHLD.O), an iconic American retail brand which traded above $100 a decade ago but have fallen to less than $1 in the past year, were down at 41 cents in trading before the bell.

It warned in September for a second time that it could go out of business, hurt by falling foot traffic at its brick-and-mortar stores as customers shift online. Those include Sears Home Services and the company's flagship Kenmore brand, which Lampert offered to buy in August for $400 million. Seritage Growth Properties, which has master leases on 230 Sears stores, slid 4 per cent, CBL & Associates Properties lost 1.1 per cent and Pennsylvania REIT was down 0.5 per cent.

Sears newest store in the Dallas area opened in 2000 at Frisco's Stonebriar Centre but most Sears stores are in the region are in older regional malls that were built in the 1970s and 1980s: Southwest Center Mall in Dallas, Town East Mall in Mesquite, Irving Mall, Collin Creek Mall in Richardson, Vista Ridge Mall in Lewisville, Richardson Square in Richardson, The Parks at Arlington, Hulen Mall in Fort Worth and North East Mall in Hurst. In January, it had announced plans to shut down 39 other stores.

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The Wall Street Journal quoted sources saying Lampert wants to restructure and is anxious that a bankruptcy filing will lead to a liquidation, which has happened with so many retailers, the most recent being Toys R Us.

Sears hopes Carr can be the salesman it needs to win over creditors.

Larry Perkins, founder and CEO of consulting firm SierraConstellation Partners, told the Washington Post on Wednesday that Sears' hiring of bankruptcy experts "is not a sure sign by any means, but it's certainly a leading indicator" that bankruptcy could be on the horizon.

Sears was at one point America's largest retailer and its largest employer. "Maybe it's the phoenix rising from the ashes, but we'll see".

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