Billionaire who led Sears into bankruptcy offers to buy it

Irving Hamilton
December 8, 2018

ESL is bidding for the stores, distribution centers and related assets, including Sears' Kenmore and DieHard brands.

Hundreds of Sears stores across the US could be saved in what one analyst called "a last-ditch effort" by company chairman Edward Lampert to buy the company out of bankruptcy. It then said it would shutter 142 unprofitable stores in the hopes that it could stay in business. Included in the $4.6 billion bid is a credit bid valued at $1.8 billion. Lampert stepped down as Sears CEO following the October 15 bankruptcy filing.

Last month, Sears announced it would close another 40 stores, including Sears locations at Stroud Mall in Stroud Township, Monroe County, and at Berkshire Mall in Wyomissing, Berks County. These assets also include approximately $1.8 billion of retail inventory and credit card and pharmacy receivables.

Firms that specialize in going-out-of-business sales, so-called liquidators, were also expected to make preliminary offers to shut Sears down, according to sources familiar with the matter.

"Sears is an iconic fixture in American retail, and we continue to believe in the company's enormous potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure", Lampert said in the letter.

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The bid assumes that about 50,000 employees would continue working for the company and a reinstatement of the severance program.

The bid comes days after Sears filed an updated budget with the Bankruptcy Court showing the retailer expected to earn nearly $246 million less during the critical holiday shopping season than it forecast when it declared bankruptcy.

More than a decade ago, the hedge fund manager touted his merger of Kmart and Sears as laying the groundwork for their revival, a scenario that not only didn't pan out, but had Lampert stepping down as CEO of the retailer just after its bankruptcy filing, while retaining the title of chairman.

Lampert's ESL Investments already is Sears Holdings' biggest shareholder and creditor. In 2004, Kmart said it would acquire Sears for $11 billion, with the idea being that somehow the two embattled retailers would be better off together than apart.

Preliminary indications of interest for Sears assets were due Wednesday, according to court papers. Further bids would trigger an auction in January.

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