US retail giant Sears has filed for bankruptcy after succumbing to huge debts and losses.
The company, which is more than 100 years old, was once America's largest retailer but has been battered by fierce competition and the rise of internet shopping.
Sears, which still has 886 stores across the US, was left fighting for its life ahead of a key $134m (£102m) debt repayment due at the start of this week.
Court papers showed it had now filed for Chapter 11 bankruptcy, a process that allows indebted companies to restructure its debts.
Sears began life as a mail order catalogue in the 1880s - a pioneering business that has been described as the Amazon of its day.
It came to dominate US malls and at its peak sales were equivalent to 1% of US gross national product. It was overtaken as America's largest retailer by Walmart in 1989.
Sears - which took over smaller rival Kmart in 2004 - joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years, with Toys R Us among the highest profile.
It now faces the question of whether it can continue as a much smaller concern or will be forced out of business altogether.
Craig Johnson, president of retail consultancy Customer Growth Partnership, said: "This is a company that stood like a colossus over the American retail landscape.
"Hopefully a smaller new Sears will be healthier."
The bankruptcy, which comes ahead of the crucial holiday shopping season, will have an impact on tens of thousands of workers as well as store landlords.
Sears still employed 90,000 people this year though this was down from a peak of 350,000.
The company has racked up $6.26bn in losses - excluding one off items - since its last annual profit in 2010, according to analysis from Ken Perkins of research firm Retail Metrics.
Sales of $16.7bn in its last fiscal year are down from $50bn in 2008.
The number of stores has fallen to fewer than 900, down from 4,000 in 2012.
Its stock market valuation, $11bn at the time of the merger with Kmart, has shrivelled to just $37m.
Chief executive and largest shareholder Eddie Lampert has reportedly been trying to arrange a deal that, while in bankruptcy protection, see Sears close hundreds of its stores but at least stay in business.
Comments
Post a Comment
comments below