It’s known as one of the most famous department store chains in the United States. Which has had a career of more than a century. However, at the end of 2018 we learned that it had declared bankruptcy. How is it possible that this happened? Let’s explain what happened.

What led Sears to declare bankruptcy

This famous American brand has had a long history. It managed to consolidate itself in one of the most challenging markets in the world and be the largest one. However, after the arrival of the 21st century, things seemed to turn sour. Particularly at the beginning of the decade of the 2010s. When problems began emerging.

Since 2013, Sears began to experience crippling sales declines. Which according to an article by Business Insider, forced it to sell assets and close stores. Unfortunately, all of this unleashed a snowball that was falling and getting bigger and bigger. Eddie Lampert, current CEO of the company, feared for the worst.

According to the mentioned sources, he and the company tried to obtain financing. In a last attempt to keep Sears afloat and avoid possible losses. However, the decline had already gone too far. Anticipating what would happen Eddie Lampert made a last-minute offer of the company’s assets for $4.4 billion.

This occurred after Sears applied for Chapter 11 bankruptcy protection in mid-October. Then it was announced that the brand would close another 142 stores and that Eddie Lampert would step down. The Sears bankruptcy statement echoed so much that even President Donald Trump lamented the fact publicly.

Future, reflections and current status of Sears

As a result of what happened with Sears, many experts, reporters and others have come out giving pertinent information. An article from CNBC reported what would be happening with the brand in early 2019. It was known that Eddie Lambert was trying to buy some of the remaining stores to prevent them from being lost.

At the time of bankruptcy, the company had around 70,000 employees. Many of them lost their jobs or are very close to doing it. Neil Saunders, director of GlobalData Retail, said the reason why Sears went bankrupt was because it “failed in all aspects of retail.” After an apparent mismanagement.

In fact, an article by Usa Today expresses that a group of creditors accused the Sears CEO of having “orchestrated a plan to steal”. In which they said that Eddie Lampert took advantage of the decline of the company to profit from the sale of their assets. And they asked a federal judge to approve the Sears settlement instead of keeping it alive.

In his defense, Lampert said that all his actions were ethical and that he wanted to prevent the massive loss of jobs. Both he and other spokesmen of the company have declined to give interviews or information on the matter multiple times. ESL Investments, Lampert’s private hedge fund, also denied these accusations publicly.

Recently, the Pension Benefit Guaranty Corporation criticized Lampert’s plans. Who’s waiting for the approval of his offer for him and ESL to buy Sears, to save what’s left of it. Although many oppose this idea and try to prevent it from happening, everything seems to be directed to that outcome.

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