Sears retail shop files for bankruptcy

After the bankruptcy announcement appliance maker Whirlpool said that it expects a "very limited impact" to its business. But as we've seen with RadioShack and Sports Authority, that can be the prelude to a retailer's liquidation.

If Sears does file for Chapter 11, the company could try to stay in business, using the court process to shed debt and unaffordable leases.

CEO Ed Lampert, a hedge fund titan who acquired the company in 2005, became known for successfully spinning off some of Sears' most well-known brands, like Orchard Supply and Land's End, even as the iconic department store itself languished. At 1,454 feet, the building was the tallest in the world.

The Kmart on Avenue of the Cities is among the 142 Sears and Kmart locations that will close after the company filed for bankruptcy.

"As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers", said Edward S. Lampert, who stepped down as Sears Holdings' CEO and remains board chairman. In its last fiscal year, it generated $16.7 billion in sales, down from more than $50 billion in 2008. The company will have more than 500 stores remaining.

Those deals could be subjected to new scrutiny by Sears' creditors in bankruptcy court.

"What they've always said to me, we certainly are happy to get back the boxes", said Haendel St. Juste, a REIT analyst at Mizuho Americas in NY.

The company listed $6.9 billion in assets and $11.3 billion in liabilities in documents filed in the US Bankruptcy Court in the Southern District of NY.

At its peak in the 1960s, Sears sold everything from toys to auto parts to mail-order homes, and was a key tenant in nearly every big mall across the United States.

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"It's not been a surprise but it's been frustrating that it's taken so long", David Bujnicki, in charge of investor relations and strategy at Kimco, said in an interview of the long-expected bankruptcy.

The filing, made in U.S. Bankruptcy Court for the Southern District of NY, lists total assets as $6.937 billion and total debts as $11.339 billion as of August 4.

Whirlpool said Sears' bankruptcy will have a limited impact on its business, while Electrolux said it did not assess a need for material one-time costs as an immediate effect of Sears' debt restructuring.

"It is going to be expensive, in some cases, to redo these boxes, but that's just part of being a landlord", Rothman said.

The stock price was 41 cents a share in pre-market trading Monday morning - up from Friday's closing price of 34 cents.

Sears employed about 89,000 workers in the USA as of February, compared with 246,000 people five years ago.

Sears has two days to come up with $134 million.

In a March 2017 government filing, Sears said there was "substantial doubt" it would be able to keep its doors open - but insisted its turnaround efforts would mitigate that risk. But the REIT said the four stores now at the site are doing well and calls the redevelopment a "game-changer". The metro-east's nearest Kmart, in the Flower Valley Shopping Center in Florissant, Missouri, will close.

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