Sears Bankruptcy Filing Reports Cause Stock To Sink

Wednesday, October 10th 2018, 10:29 am
By: News On 6

Sears is considering filing for bankruptcy protection as soon as this week as it faces a large debt repayment on Monday, reports The Wall Street Journal. Shares of Sears Holdings Corp. plunged as much as 31 percent in pre-market trading.

The company has hired advisory firm M-III Partners LLC to prepare the bankruptcy filing, although the retailer is continuing to consider other options to avoid insolvency, the report said. Sears is facing a debt repayment of $134 million on Monday, although one option would be for its CEO, the billionaire investor Edward Lampert, to make the payment and rescue the company from bankruptcy, the Journal noted. 

Sears, an icon of American retailing since the 19th century, has struggled to appeal to consumers in recent years, losing customers and financial strength in the process. 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 that they preferred shopping at Goodwill over Sears.  

5/31/2018 Related Story: Sears To Close Another 72 Stores As Sales Plunge

Restructuring through a bankruptcy filing may not solve Sears' underlying problems, which include lost market share and disillusioned customers, Saunders noted. Even after several rounds of store closures across the country in recent years, the holding company still operates around 500 Sears stores and 360 Kmart stores. 

The Associated Press contributed to this report.