Sears, which started as a mail order catalog in the 1880s, has been on a slow march toward extinction as it lagged far behind its peers and incurred huge losses over the years. But the retail landscape is littered with brands that tried to reorganize in the bankruptcy process and liquidated their businesses instead, such as RadioShack, Toys "R" Us and Sports Authority.
Coinciding with the filing, Edward Lampert, who engineered Kmart's $11 billion acquisition of Sears, is stepping down as CEO. The company is negotiating an additional $300 million in financing from ESL Investments, a hedge fund run by Sears' former chief executive, Eddie Lampert. Sears' stock has fallen more than 50% in the last five days to around 35 cents a share. But any movement toward bankruptcy seemed to gain momentum last week with reports that Sears had hired New-York based M-III Partners to prepare the filing.
There are just four Sears open in metro Detroit: in Livonia, Lincoln Park, Novi and Westland.
The Sears collapse has been a long time coming, but it's still going to go off like a bomb - perhaps especially so in real estate. Total revenue dropped 30 percent in the most recent quarter, hurt by continued store closings. "Sears Roebuck when I was growing up was the big deal". But the onset of discounters like Walmart created challenges for Sears that have only grown. Those include Sears Home Services and the company's flagship Kenmore brand, which Lampert offered to buy in August for $400 million. Its stores became an albatross.
Lampert tried multiple strategies to revive Sears since using the Kmart chain to acquire Sears in 2005, sometimes with his own money. That's the toughest part of this of all, of course; my first job outside of flipping burgers or making pizzas was at the Sears in Cerritos, California, where I worked for about eighteen months. For the healthy malls, landlords would welcome a Sears departure, allowing them to cut up the space and fill it with several smaller successful stores that combined would bring in higher revenue.