Hoffman Estates, Ill. — Sears Holdings Corp. (NASDAQ: SHLDQ) has reached a temporary deal to avoid liquidation and keep 425 of its stores open, according to media sources.
After it was widely speculated that Sears Chairman Eddie Lampert’s $4.4 billion bid to save the company would be rejected, representatives of Sears agreed to a revised 11th-hour bid from Lampert’s hedge fund, ESL Investments, that gives the 126-year-old company another small shot at survival.
Liquidation remains a possibility for Sears. According to USA Today, ESL Investments has until 4 p.m. Wednesday to come up with a $120 million deposit to keep the deal alive. In addition, the company’s assets will be auctioned off Monday, Jan. 14.
The original bid by Lampert, the man behind the retailer’s merge with Kmart in the 2000s, would have theoretically saved 50,000 of the retail chain’s 68,000 jobs nationwide, per the network. CNBC reported that Hoffman Estates-based Sears considered the bid by Lampert’s hedge fund, ESL Investments, to be insufficient, particularly with regard to covering fees and payments owed to vendors.
In October 2018, Sears filed for Chapter 11 bankruptcy after it failed to meet a deadline for a debt repayment of $134 million. That announcement followed news of the company’s plans to shutter 142 stores by the end of 2018. Lampert also stepped down from his role as CEO as the bankruptcy filing was announced.
Sears had not yet issued a statement at the time of this writing. Sears has lost about $5.8 billion over the last five years, according to The New York Times, and closed more than 1,000 stores over the last decade.
Sears’ stock price opened at 16 cents per share on Jan. 8, 2019 and has not traded above $1 per share since September 2018, putting it at risk of being delisted from the exchange.
— Taylor Williams