Sears Holdings closing 80 more stores

NEW YORK -- Sears Holdings Corp. said Friday that it is closing 80 more Sears and Kmart stores as it teeters on the brink of liquidation.

The stores, none in Arkansas, are due to close by March. That's in addition to 182 stores already slated for closure, including 142 by the end of this year and 40 by February.

Sears Chairman Eddie Lampert on Friday asked for more time to round up financing for his bid to keep Sears alive, according to people with knowledge of the matter. The retailer, once the nation's largest department store chain, set a deadline of 4 p.m. New York time Friday for bids.

Hedge fund manager Lampert has been the only potential buyer aiming to keep the business running. He is counting on getting some financing from lenders including Bank of America Corp. and is still seeking additional funds, said the sources, who asked not to be identified because the process isn't public.

The company filed for Chapter 11 bankruptcy protection in October, saying at the time it would close more than 20 percent of all stores, keeping open only its 500 most profitable locations.

Sears has also been soliciting liquidation bids that would mean shutting hundreds of Sears and Kmart stores, and throwing more than 50,000 people out of work. The rules give Sears flexibility to extend the deadline or make other changes that might promote more bids.

Representatives for Sears, based in Hoffman Estates, Ill., and for Bank of America declined to comment. Officials at Lazard, the investment banker for the retailer, didn't immediately respond to messages. Lampert and his hedge fund, ESL Investments Inc., also didn't respond to messages.

As originally outlined, Lampert's rescue plan would be partly funded by swapping the debt he holds for full ownership of the company. But he also needed cash, and some lenders have balked because Sears has been losing money for years, and suppliers are concerned they might not get paid for goods that they ship to restock stores.

The retailer that started out as a mail order catalog in the 1880s has been in a slow death spiral, hobbled by the recession and then overwhelmed by rivals both down the street and on the Internet.

Sears Holdings Corp. joins the list of retail brands taken over by hedge funds that collapsed under the weight of debt forced upon them.

Under Lampert, Sears has bought time by spinning off stores and putting on the block the brands that had grown synonymous with the company, such as Craftsman. The company's biggest shareholder, Lampert loaned out his own money and put together deals to keep the company afloat and to turn whatever profit he could for ESL hedge fund. Lampert and ESL have been trying to buy the rest of Sears for up to $4.6 billion in cash and stock.

Information for this article was contributed by staff members of The Associated Press; and by Lauren Coleman-Lochner, Katherine Burton, Nabila Ahmed and Josh Saul of Bloomberg News.

Business on 12/29/2018

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