Sears out of bankruptcy, a handful of stores are left

Sears Holdings has emerged from bankruptcy after more than 10,000 court filings and a four-year stay that saw the department store chain shrink from almost 700 stores to less than two dozen.

The bankruptcy estate’s reorganization plan took effect on Oct. 29, signaling an end to Chapter 11 and the start of a liquidation process for its remaining assets.

Sears Holdings is a shell company. It sold its stores in February 2019 to ESL Investments, an affiliate of former Sears chair Eddie Lampert. The $5.2 billion sale included more than 400 retail locations.

Syracuse University professor of retail practice Ray Wimer doesn’t expect the remaining 20+ Sears stores from that sale to survive. “They do not have an appealing value proposition to customers and the amount of competition in the retail marketplace offering similar goods means the end will come at some point,” he told FOX Business

Where America shopped

Sears once advertised itself as “Where America Shops” and boasted merchandise lines from supermodel Cheryl Tiegs and “Charlie’s Angel’s” star Jaclyn Smith.

At its peak, Sears, Roebuck was the world’s largest retailer, with nearly 3,500 Sears and Kmart stores, including 2,350 full-line and off-mall stores, and 1,100 specialty retail stores. Sears also had a portfolio of prominent brands and operating businesses, including Kenmore, DieHard, Craftsman, Sears Home Services, Sears Auto Centers and Innovel.

Competitor Walmart had just over 3,000 stores: 1,353 discount stores and 1,713 Supercenters.

Lampert, then chair of Kmart Holding, bought Sears for $11 billion in March 2005 in a bid to hold off brick-and-mortar competitors such as Walmart and e-commerce competitors such as Amazon.

At the time of the merger, the Sears-Kmart combo, called Transformco, had annual revenues of $55 billion, a fifth of Walmart’s fiscal 2004 total of $256 billion. 

Amazon had annual revenue of $2.54 billion. Since then, the world’s largest online retailer has grown to $469.8 billion in sales while Walmart ended 2021 at $572.8 billion. Transformco is private and does not report financial results.

Sears tried to stave off bankruptcy by closing stores and selling assets. Sears sold its Craftsman brand to Stanley Black & Decker in 2017 for $775 million and closed 300 stores in 2018.

It wasn’t enough.

The company entered bankruptcy in October 2018 with 687 stores. Like many brick-and-mortar retailers, the department store fell victim to declining sales. Revenues dropped 53.8% in the five years prior to bankruptcy, prompting some vendors to demand unfavorable payment schedules, reduce subsidies or ask for cash in advance as a condition for continued delivery of merchandise.

Lampert bought Sears’ remaining assets in a January 2019 bankruptcy auction and acquired Sears Hometown and Outlet Stores in June. He sold DieHard to Advance Auto for $200 million in December 2019.

Transformco has continued to sell off stores and closed the final 15 Sears Auto Center locations in January.

Professor Wimer says, based on what he has seen, he expects the Sears stores to die a slow death, noting it’s unlikely anyone would be interested in buying any of Sears’ assets, if Lampert were interested in selling, given the small footprint of the remaining stores.

There are now less than two dozen Sears stores, excluding smaller format Hometown Stores, according to BroStocks and the Sears website.

Surviving Sears stores:

• Alaska: Anchorage (Home & Life)
• California: Burbank, Concord, Stockton, Whittier
• Colorado: Fort Collins (Appliance & Mattress)
• Florida: Miami, Orlando, Palm Beach Gardens
• Hawaii: Honolulu (Appliances & Mattress)
• Kansas: Overland Park (Home & Life)
• Louisiana: Lafayette (Home & Life)
• Maryland: Frederick
• Massachusetts: Braintree
• New Jersey: Jersey City
• North Carolina: Greensboro
• Pennsylvania: Camp Hill
• Puerto Rico: San Juan
• Texas: El Paso, Pharr (Appliances & Mattress)
• Washington: Tukwila, Union Gap