Is Sears Going Bankrupt? The Cash-Strapped Retailer Drops a New Clue It’s Nearing Chapter 11
Sears is preparing for a possible bankruptcy filing with the help of restructuring firm M-III Partners, according to the Wall Street Journal. The retail giant faces a $134 million debt payment on October 15th.
Sears did not immediately return Fortune‘s request for comment on the WSJ report.
The retailer on Tuesday also named a new director to its board. Alan Carr, formerly of law firm Skadden, Arps, Slate, Meagher & Flom, has experience leading complex financial restructurings, Sears said in a statement.
Sears CEO Eric Lampert operates a hedge fund that is Sears’ biggest shareholder and proposed last month to use the firm to buy some of Sears’ holdings in order to shrink the retailer to profitability without going into bankruptcy.
Sears stock dropped below the $1 threshold at the end of September. (If it remains under that threshold for 30 days it could get booted from the NASDAQ stock exchange where it is listed.) Shares of Sears traded at a peak of $144 more than ten years ago.
The company’s sales have dropped almost 60% since 2011, and it’s reported losses of $11 billion in that period. It still has almost 900 stores, and its stocks bounced upward last year when the retailer announced a partnership with Amazon to install car tires bought online.
Also noteworthy in Sears’s recent history was the purchase of K-Mart, a lower-end retail chain, in 2004. Lampert divided the expanded company into dozens of units that competed for resources. Together they have closed several hundred stores in the last three years. Sears Canada declared bankruptcy last year.
Sears was founded in 1886 and grew alongside the American postal service via catalog sales. It printed its last catalog in 1993.