A Sears Essentials store in Palatine, Illinois.
Sears Holdings Corp (SHLD.O) CEO Eddie Lampert has stepped in to contribute towards a financing package of between $500 million (382 million pounds) and $600 million that the US department store operator was close to securing on Sunday to fund operations during bankruptcy proceedings, people familiar with the matter said. It listed $6.9 billion in assets and $11.3 billion in liabilities in documents filed in the bankruptcy court, Reuters reported.
Some like Payless ShoeSource have had success emerging from reorganisation in bankruptcy court but plenty of others have not, including Toys R Us and Bon-Ton Stores, both of which collapsed after a Chapter 11 filing.
Since 2012, losses at Sears have piled up, and multiple efforts to steady the company by Chief Executive Officer Eddie Lampert - sometimes with his own money - have failed to restore its fortunes. He also called on the company to sell off $3.25 billion in real estate and assets. The Company's Board has created an Office of the CEO, which will be responsible for managing the Company's day-to-day operations during this process.
The company was started by Richard Sears, a train station agent in Minnesota who began selling watches by mail in 1886, according to the company's website. It will shut another 142 stores by the end of the year, following 46 recently announced store closures.
A key unresolved aspect of Sears' negotiations with lenders involves setting deadlines for Sears to achieve specific business goals while under bankruptcy protections, the sources said.
A spokesman for Lampert declined to comment on details of the bankruptcy financing, while a Sears spokesman and spokespeople for the banks didn't immediately respond to requests for comment.
Lampert has often attempted to keep Sears viable with loans. But it struggled to get more people through the doors or to shop online.
Lampert continued, "As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers".
Lampert himself has had a controversial tenure at Sears.
By the time Sears limped into bankruptcy on Monday, the once-great company was shriveled and sickly. It has sold off the legendary Craftsman brand and is considering an offer from Lampert for the Kenmore appliance name. Plus, in bankruptcy proceedings, the largest creditors become the owners of the new entity. Options could range from food halls to pop-up stores to Tonya-Harding-esq skating rinks, Rosenblum said - so long as the concept was about more than just shopping. Lampert also became Land's End Inc's biggest shareholder when the clothing manufacturer was spun out of Sears in 2014.
"Here you have what was the original Amazon on steroids", Rosenblum said.