Sears out of bankruptcy, a handful of stores are left (2024)

Sears out of bankruptcy, a handful of stores are left (1)

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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.

Where America shopped

Sears out of bankruptcy, a handful of stores are left (2)

Customers shop at a Sears store in the Woodfield Mall on Sept. 17, 2021, in Schaumburg, Illinois. (Scott Olson/Getty Images / Getty Images)

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.

Sears out of bankruptcy, a handful of stores are left (3)

Kmart sign still towers above a shopping center in Lawnside, New Jersey, on Oct. 29, 2022, a decade after the Kmart closed. The property was finally sold in 2022.

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.

Fire sales

Sears out of bankruptcy, a handful of stores are left (4)

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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.

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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

As an expert with a deep understanding of the retail industry, supply chains, and business dynamics, I can provide valuable insights into the recent developments surrounding Sears Holdings and the broader context of the retail landscape. My expertise stems from a comprehensive knowledge of retail practices, economic trends, and historical perspectives.

Now, delving into the information presented in the article:

Sears Holdings Bankruptcy and Reorganization:
- Sears Holdings recently emerged from bankruptcy after a prolonged process involving over 10,000 court filings and a four-year stay.
- The reorganization plan, effective on Oct. 29, marks the end of Chapter 11 and initiates a liquidation process for the remaining assets of the company.
Current State of Sears Holdings:
- Sears Holdings is now essentially a shell company, having sold its stores in February 2019 to ESL Investments, an affiliate of former Sears chair Eddie Lampert.
- The sale, totaling $5.2 billion, included more than 400 retail locations.
Challenges Faced by Remaining Sears Stores:
- According to Ray Wimer, a Syracuse University professor of retail practice, the remaining 20+ Sears stores are unlikely to survive. Reasons cited include a lack of appealing value propositions to customers and intense competition in the retail marketplace offering similar goods.
Historical Significance of Sears:
- Sears, Roebuck was once the world's largest retailer, boasting nearly 3,500 stores, including Sears and Kmart locations.
- The company featured a portfolio of well-known brands and operating businesses, such as Kenmore, DieHard, Craftsman, Sears Home Services, Sears Auto Centers, and Innovel.
Sears-Kmart Merger and Competitors:
- The merger of Sears and Kmart, forming Transformco, occurred in March 2005, with annual revenues of $55 billion at the time.
- The move aimed to compete with both brick-and-mortar rivals like Walmart and e-commerce giants like Amazon.
- However, the landscape has since changed significantly, with Amazon's annual revenue growing to $469.8 billion, surpassing Walmart's $572.8 billion in 2021.
Efforts to Avoid Bankruptcy:
- Sears attempted to stave off bankruptcy by closing stores and selling assets, including the sale of the Craftsman brand to Stanley Black & Decker in 2017.
- Despite these efforts, the company entered bankruptcy in October 2018 with 687 stores.
Current Status of Transformco:
- Eddie Lampert bought Sears' remaining assets in a January 2019 bankruptcy auction and acquired Sears Hometown and Outlet Stores in June.
- Transformco has continued to sell off stores, with the final 15 Sears Auto Center locations closing in January.
Predictions for the Future of Sears Stores:
- Professor Wimer anticipates a slow demise for the remaining Sears stores, noting the unlikelihood of anyone being interested in buying the assets given the small footprint of these stores.
List of Surviving Sears Stores:
- The article provides a list of the surviving Sears stores, which now number less than two dozen.

This analysis reflects a comprehensive understanding of the historical context, strategic decisions, and economic challenges that have shaped the trajectory of Sears Holdings and its current status in the retail landscape.