Sears Files for Bankruptcy, Eddie Lampert Steps Down as CEO
And there it is. After years of slumping sales and a “right-sizing” strategy that was aimed at helping the once proud retailer become profitable, Sears Holdings has filed for bankruptcy. To coincide with the filing, CEO Eddie Lampert has stepped down as CEO of the company—a position he has held since January 2013—effective immediately, though he will remain on as its chairman.
In a press release published early Monday morning said that the company will attempt to go the Chapter 11 route in order to reorganize the company in a more profitable manner. In addition, Sears has initiated a number of different moves intended to get the bankruptcy process rolling more quickly. Among those moves, Sears will shut down an additional 142 stores towards the end of the year, and the company has appointed Mohsin Meghji, a managing partner of M-III Partners, as its Chief Restructuring Officer.
In the statement, Sears said that it had secured $300 million in “senior priming debtor-in-possession” financing from its lenders and is negotiating an additional $300 million in financing that would come from Lampert’s ESL hedge fund. The company intends to use those funds to support its operations during the restructuring process. Sears Holdings did acknowledge that it would continue to pay employee wages and benefits, honor member programs, and pay vendors and suppliers in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.