Sears, known as the oldest departmental stores having operated for about a Century, pioneering the strategy of selling everything to everyone, on Monday filed for bankruptcy protection.
This is even as the company plans to 142 more of its stores adding to an initial 46 which were recently shut due to trade declines and borrowings.
Experts say that Sears brush with death is occasioned by its inability to adapt to the digital age having existed long before the coming of Walmart and Amazon, both of which are doing better.
Sears company had long ago given up its mantle as a retail innovator. It was overtaken first by big box retailers like Walmart and Home Depot and then, by Amazon as the go-to shopping destinations for clothing, tools and appliances.
In the last decade, Sears had been run by a hedge fund manager, Edward S. Lampert, who sold off many of the company’s valuable properties and brands, but failed to develop a winning strategy to entice consumers who increasingly shop online.
Ten years ago the company employed 302,000 with over 500 stores but today there are about 68,000 people still working at Sears and Kmart – a company that was acquired after surviving bankruptcy.
According to New York Times, the retailer aims to use a Chapter 11 bankruptcy filing to cut its debts and keep operating at least through the holidays, according to two people briefed on the matter who spoke on condition of anonymity to discuss the company’s plans.
As part of the reorganization plan, the company is to receive a loan of more than $500 million to help keep its shelves stocked and employees paid, these people said.
“It’s a sad day for American retail,” said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. “There are generations of people who grew up on Sears and now it’s not relevant. When you are in the retail business, it’s all about newness. But Sears stopped innovating.”
Founded shortly after the Civil War, the original Sears, Roebuck & Company built a catalog business that sold Americans the latest dresses, toys, build-it-yourself houses and even tombstones. In their heyday, the company’s stores, which began to spread across the country in the early 20th century, were showcases for must-have washing machines, snow tires and furniture.
More recently, Sears became known for another distinction — Mr. Lampert’s audacious feats of financial engineering. He has spun off numerous assets from the retailer into separate companies that his hedge fund invests in.