The company’s chairman and largest shareholder, Eddie Lampert, won a bankruptcy auction for Sears in New York, averting liquidation of the iconic chain, according to a source familiar with the negotiations. The person agreed to speak on condition of anonymity because they were not authorized to discuss the negotiation publicly.
Lampert was the only one to put forth a proposal to rescue the floundering company in its entirety. He had sweetened his bid multiple times to more than $5 billion over the last few days through an affiliate of his hedge fund ESL. Details of the final terms couldn’t be learned. Lampert, who steered the company into bankruptcy protection, may be able to keep the roughly 400 remaining Sears stores open, which would mean tens of thousands of jobs are saved, at least for now.
Whether Sears, founded 132 years ago as a mail order watch business, can survive in the era of Amazon remains questionable. Sears filed for Chapter 11 bankruptcy protection in October. At that time, it had 687 stores and 68,000 workers. At its peak in 2012, its stores numbered 4,000. The company, hammered during the recession and outmatched in its aftermath by shifting consumer trends and strong rivals, hasn’t had a profitable year since 2010 and has suffered 11 straight years of annual sales declines. Lampert has been criticized for not investing in the stores, which remain shabby. [Source: AP News]