Sears Holdings has filed for Chapter 11 bankruptcy protection and announced the company’s CEO Edward Lampert has stepped down but will remain chairman of the board.
In addition, the struggling retailer will close 142 locations near the end of 2018 with liquidation sales at those locations, which as of press time have not been made public, commencing soon.
The company has received commitments for $300 million in senior priming debtor-in-possession (DIP) financing from its senior secured asset-based revolving lenders and is negotiating a $300 million subordinated DIP financing with ESL Investments, Inc. Lampert is chairman/CEO of ESL.
Additionally, Sears and Kmart stores along with all web and mobile platforms were scheduled to be open and operating as normal on Monday, October. 15. Company officials said they are committed to working with its vendors and other partners to help maintain inventory levels and ensure timely product delivery.
In a company press release announcing the bankruptcy filing, Lampert said the move will give Sears Holdings the flexibility to strengthen its balance sheet, enabling the company to accelerate its strategic transformation, continue right-sizing its operating model, and return to profitability.
“Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debtholders, and be better positioned to execute on our strategy and key priorities,” he said.
With Lampert stepping down from the CEO role, the company’s board of directors has created an Office of the CEO that will be responsible for managing the company’s day-to-day operations. The Office of the CEO will be composed of Robert Riecker, chief financial officer; Leena Munjal, chief digital officer, customer experience and integrated retail; and Gregory Ladley, president of apparel and footwear.
Also, Mohsin Meghji, managing partner of M-III Partners, has been appointed chief restructuring officer. Meghji is a turnaround professional with a track record of revitalizing companies experiencing financial, operational or strategic transitions to maximize value for stakeholders, Sears Holdings said.
Recently, Sears Holdings hired M-III Partners to assist the company in preparing a bankruptcy filing.