Sears Files for Bankruptcy
After years of financial struggles, Sears Holding Corp — the parent owner of Sears and Kmart — has officially filed for bankruptcy. The company missed a deadline to pay a $134 million debt payment, and is moving forward with the Chapter 11 process.
Stores have been closing regularly every month, with several shuttering in central Ohio in 2017, and company leaders stated specifically last year that the the future of Sears was in “substantial doubt.”
With a history that stretches back over 130 years, Sears grew from a mail order catalogue business into the largest retailer in the world. That title was held for decades until Walmart surpassed it in the late 80s. Emerging trends with online shopping, changes in Millennial spending habits, the decline in popularity of traditional malls, and corporate mismanagement have all contributed to the decline of the retail giant over the past decade.
Some economists are placing the blame specifically at the feet of “Vulture Capitalists,” a term used to describe hedge fund managers that acquire struggling companies and drain any remaining profits while the ship sinks.
“Eddie Lampert is the hedge fund manager who has been the controlling shareholder of Sears and Kmart in the U.S., and of Sears in Canada during its long, sad decline,” states Alan Freeman in a 2017 article published at iPolitics. “Miraculously, he has managed to line his pockets while thousands of employees have lost their jobs and are watching their retirement plans melt in the summer sun.”
A similar strategy was deployed by the owners of Toys ‘R Us, which filed for bankruptcy in 2017 and closed all stores in 2018 (although talk has been brewing about a retail comeback for the brand).
“The private-equity barons who bought the company in 2005 have reaped nearly $500 million in extracted profits, and top executives are set to leave with $16 million worth of golden parachutes,” states a TheNation.com article penned by Winnie Wong and Michael Kink.
Meanwhile, some consumers in parts of Ohio are being left with fewer and fewer retail options as stores like Sears, Kmart and Toys ‘R Us continue to vanish. Walmart, Target and Amazon are looking to step in to fill the gaps as the holiday shopping approaches.
Currently, Sears only operates three stores in central Ohio, located at Polaris Fashion Place, The Mall at Tuttle Crossing, and the Indian Mound Mall in Heath. There is only one central Ohio Kmart remaining, located on Stringtown Road in Grove City.
There is no word yet on when remaining Sears or Kmart stores may close, or liquidations and sales may begin.
For more information, visit sears.com.