Iconic Sears chain nears bankruptcy

American department store chain Sears is suffering from heavy debt and considers all options, including a thorough reorganisation or even bankruptcy. The company’s situation will become clearer later this week.

Rescue plan

According to the Wall Street Journal, the retailer has hired some advisors to prepare for a possible liquidation. The department store chain is losing money and carries heavy financial debts: it is expected to pay off a 134 million dollar debt by Monday, but lacks the means.

Besides bankruptcy, the chain is still looking into other possible routes: CEO Eddie Lampert, who has a 31% investment in the company (and another 19% through his fund ESL Investments), has been working on a rescue plan for years and is not willing to give up those efforts. He has now made the suggestion of selling 1.5 billion dollar worth of real estate. In addition, he is said to have made a bid of some 400 million dollar to acquire Kenmore, a brand of household appliances sold at Sears.

Sears is an icon of the American retail industry with a rich history: the company was founded in 1892 under the name Sears, Roebuck and Company. It became the largest retailer in the United States and stayed at the top until 1989, when it was surpassed by Walmart. In recent years, the retailer has seen steep decline: in 2010 Sears still had 3,500 outlets, but today only 506 are left.