Sears has filed for Chapter 11 bankruptcy protection, buckling under its massive debt load and staggering losses. Sears once dominated the American retail landscape. But the big question is whether its shrunken version can be viable or will be forced to go out of business, ending the final chapter for an iconic name that originated more than a century ago.
Sears filed in U.S. Bankruptcy Court in White Plains, N.Y.
Sears says it will "close 142 unprofitable stores near the end of the year. Liquidation sales at these stores are expected to begin shortly. This is in addition to the previously announced closure of 46 unprofitable stores that is expected to be completed by November 2018."
Chairman and CEO Edeard Lampert is giving up his CEO role but will remain as chairman. Three executives will take over the CEO functions for now.
The filing came just before Sears would have had to repay $134 million in loans later on Monday.
The company, which started out as a mail order catalog in the 1880s, has been on a slow march toward extinction as it lagged far behind its peers and incurred massive losses over the years.
Analysts have predicted the company would face a "liquidity event" for several years, given its deteriorating financial state. Shoppers told a survey firm in 2016 they preferred shopping at Goodwill over Sears.
The operator of Sears and Kmart stores joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate.
Some, such as Payless ShoeSource, have found success emerging from reorganization in bankruptcy court. But plenty haven't, such as Toys R Us and Bon-Ton Stores Inc. Both retailers were forced to shutter their operations this year soon after a Chapter 11 filing.
"This is a company that in the 1950s stood like a colossus over the American retail landscape," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "Hopefully, a smaller new Sears will be healthier."
Given its sheer size, Sears' bankruptcy filing will have wide ripple effects on everything from already ailing landlords to its tens of thousands of workers.
The filing, which is happening ahead of the crucial holiday shopping season, comes after rescue efforts engineered by Lampert have kept it outside of bankruptcy court - until now. Lampert, the largest shareholder, has been loaning out his own money for years and has put together deals to prop up the company, which in turn has benefited his own ESL hedge fund.
Last year, Sears sold its famous Craftsman brand to Stanley Black & Decker Inc., following its earlier moves to spin off pieces of its Sears Hometown and Outlet division and Lands' End.
The Associated Press contributed to this report.