It was reported last week that the company was preparing to make this announcement as a result of a debt payment deadline.
“Over the last several years, we have worked hard to transform our business and unlock the value of our assets,” Sears Holdings chairman Edward Lampert said in a statement to investors.
“While we have made progress, the plan has yet to deliver to results we have desired, and addressing the Company’s immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer.”
Lampert added that Sears and Kmart stores would remain open over the holiday seasons, though 142 unprofitable stores will be closed near the end of the year.
Additionally, the business enacted a number of leadership and Board changes, with Lampert stepping down as chief executive to allow a Board of the CEO to be created, consisting of chief financial officer Robert Reicker, chief digital officer Leena Munjal, and president of apparel and footwear Gregory Ladley.
M-III Partners managing partner Mohsin Meghji has been appointed as Sears’ chief restructuring officer, joining the senior management team to lead the Company’s restructuring.
“No clear path to success.”
“Today is a day that will live in infamy,” GlobalData Retail managing director Neil Saunders said. “As much as today is a conclusion of sorts, it is not the end of the story.”
Saunders said that several reasons have contributed to this outcome, but foremost among them is Sears management’s failure to evolve the store offering as retail modernised.
It is still unclear what Sears hopes to accomplish over the long term as, according to Saunders, there is no clear path to success.
“The group has tried to shrink its way to profitability for years to no avail, so it is hard to see why pursuing the same strategy under the auspice of Chapter 11 would result in a different outcome,” Saunders said.
“Ultimately, Sears needs not just to fix its financial problems. It also needs to repair the deficiencies in terms of retail strategy… only a complete change of management will bring this about.”
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