US retailer Sears Holdings, a brand that once dominated shopping malls in the country, has filed for bankruptcy.
The retailer who is the parent company of Kmart filed for Chapter 11 bankruptcy protection on Monday. The company complained of suffering, alongside other traditional retailers, from rising online competition from firms such as Amazon.
The company has been in many debts and has been closing stores and selling properties because of a load of more than $5bn. The company has 90,000 employees and, in its heyday, owned over three thousand stores. It became America’s largest retailer before being overtaken by Walmart in the 1980s.
It was gathered that the company couldn’t meet a $134m repayment that was due. So, the firm filed for bankruptcy petition. The protection postpones a US company’s obligations to its creditors giving it time to reorganise its debts or sell parts of the business.
Businessman Eddie Lampert – who serves as the company’s chief executive, biggest investor, landlord and significant creditor – had attempted to restructure the firm’s debt to avoid bankruptcy.
Mr Lampert said: “Over the last several years, we have worked hard to transform our business and unlock the value of our assets.”
He added, “While we have made progress, the plan has yet to deliver the results we have desired.”
Some critics have said the company’s problems were exacerbated by low investment in the firm’s stores, which left Sears especially vulnerable to trends driving shoppers out of stores towards online.
“That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous,” he said. “The brand is now tarnished just as the economics of its model is firmly stacked against its future success.”