AUSTIN, Texas — A Chapter 11 bankruptcy protection filed by Sears aiming to close down 142 stores including Austin location, at the same time, hoping that they can stay in business.
In late 2012, the store had over 4,000 and now it is risking remaining with a little more than 500 closing the stores for incurred huge losses over the years.
The company has suffered from outdated stores and complaint cases for customer service even for its once crown jewels. The retailer operates Kmart and Sears stores said that there are more than 142 stores that had no profits in the last years, and operates most of those will be closed soon.
More than 77 Sears and 65 Kmart stores should be shut down at the end of the year. Liquidation sales are available shortly. The closures are additions to the 46 unprofitable stores that are already predicted to be closed.
The company’s largest shareholder, Edward S. Lampert, stepped down as CEO but will still be the chairman of the board.
According to the recent release of the company’s operations, it said that Monday it has secured over $300 million in financing from the banks to keep the operations going while the bankruptcy is taking place.
The liabilities can range from $10 billion to $50 billion.
Sears now joined the list of companies which filed a bankruptcy or liquidated in recent years. There is a company called Payless ShoeSource which successfully emerged from reorganization in bankruptcy court, but other companies which are Toys R Us or Bon-Ton Stores Inc. didn’t.
The store shelves have been left bare as many vendors have demanded more stringent payment terms, says Mark Cohen, a professor of retailing at Columbia University and a former Sears executive.
Sears said it intends to pay workers’ wages and benefits without any difficulties connected with the liquidation. On Tuesday, a meeting is expected to be held for Sears employees at the corporate headquarters and other locations.