Founded in 1893 by Richard W. Sears and Alvah C. Roebuck, Sears started as a mail-order catalog business selling watches to farmers. Today, Sears Holdings Corp. has 687 Sears and Kmart stores in 49 states, 400 of which it is aiming to keep open.
White Plains, N.Y.—Sears, an icon of American retail that started as a mail-order watch business 125 years ago but has been in decline for decades, has declared bankruptcy.

The Chapter 11 filing came early Monday morning in federal bankruptcy court in White Plains, N.Y., with Sears Holdings Corp. indicating that it plans to reorganize and emerge, albeit as a smaller retailer.

In the filing, the company states it wants to find a buyer that will continue to operate the approximately 400 Sears and Kmart stores that it says are economically viable.

Of the other 287 stores, about half—142—will close and begin going-out-of-business sales right now in order to save the company money and take advantage of the holiday season. Sears said it will evaluate the remaining stores as the Chapter 11 case moves along.

The company also plans to sell off non-core assets, such as intellectual property like the Kenmore appliances and DieHard automotive battery brands, and specialty businesses, like Sears Auto Centers.

In a declaration from Chief Financial Officer Robert A. Riecker filed in conjunction with the bankruptcy petition, he states that filing Chapter 11 “present(s) an opportunity for Sears to once again transform its business and to position itself for success in the 21st century.

“The debtors hope that the company will emerge from these Chapter 11 cases, whether pursuant to a chapter 11 plan of reorganization or a successful sale process, as a streamlined and profitable version of itself.”

Founded in 1893 by Richard W. Sears and Alvah C. Roebuck, Sears started as a mail-order watch business and later expanded to sell housewares and even entire houses. It catered to customers in remote rural areas who otherwise would not have had access to a wide range of goods.

The company began opening brick-and-mortar stores in urban areas in the 1920s and 1930s when more people started moving into cities, then migrated to the suburbs to anchor malls in the ‘60s and ‘70s as the country’s population shifted once again.

Sears became a leading retailer of tools, appliances, lawn and garden care products, and automotive repair and maintenance.

In the 1990s, as “big-box” retailers began to grow in popularity and steal market share from traditional department stores, Sears added a big-box chain to its stable by merging with Kmart.

In his declaration, Riecker stated that while Sears has adapted its business to navigate population trends and consumer preferences many times over the years, its efforts to adjust to the realities of retail today—including closing stores and putting more money into online operations—have fallen short.

As it has been forced to close stores while losing market share to competitors, the retailer’s revenues have declined 54 percent over the past five years, totaling $16.7 billion in fiscal year 2017, while its debt has swelled to more than $5 billion.

Sears Holdings Corp.’s official bankruptcy filing, made in U.S. Bankruptcy Court for the Southern District of New York, lists $7 billion in assets but $11.3 billion in liabilities.

In the wake of the company’s Chapter 11 filing, CEO Eddie Lampert has stepped down, though he will remain chairman of the board.

The company has created an office of the CEO to manage day-to-day operations that is staffed by: Riecker; Leena Munjal, chief digital officer, customer experience and integrated retail; and Gregory Ladley, president of apparel and footwear.

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