Coverage: Sears accepts Lampert bid, but future is murky
Sears Holding Corp. has gotten another reprieve, care of a bankruptcy auction win for the company’s Chairman Eddie Lampert, but the problems that got the retailer into trouble in the first place still persist with little hope for change, according to experts.
Tonya Garcia of MarketWatch.com had the news:
If confirmed, the bid would keep more than 400 stores open.
“While there is no doubt that a shrunken Sears will be more viable than the larger entity which struggled to turn a profit, we remain extremely pessimistic about the chain’s future,” wrote Neil Saunders, managing director of GlobalData Retail. “In our view, Sears exits this process with almost as many problems as it had when it entered bankruptcy protection. In essence, its hand has not changed and the cards it holds are not winning ones.”
Department stores have exerted great effort and made vast investments in their businesses, from digital capabilities and e-commerce, to staff and inventory management, to keep pace with shifting consumer shopping habits and online giant Amazon.com Inc.
Jade Scipioni of FoxBusiness.com reported that employees are upset with Lampert:
“Eddie Lampert didn’t save Sears, he ran it into the ground. No one thinks their job is safe under his leadership,” Lily Wang, deputy director of United for Respect’s Rise Up Retail said in a statement to FOX Business.
Wang, who is currently working with Sears employees and their families, is calling for more transparency from the billionaire and his hedge fund, ESL Investments on his plans to help current and ex-employees, who lost their jobs over the last few years.
“Ten of thousands of laid off employees are doubling down on their demand for Lampert to honor his commitment to pay severance and to also set up a hardship fund to provide immediate support to all families impacted by the bankruptcy,” the group said in a release on Wednesday.
Mike Spector and Jessica DiNapoli of Reuters reported that a group of creditors is objecting to the deal:
A group of creditors is objecting to the deal, one of the sources said.
The sources asked not to be identified because the matter is confidential. Spokespeople for Sears and ESL did not immediately return requests for comment.
Lampert’s only challenger in the auction was Sears itself, and how much it would reap in a sale of its businesses and assets in pieces, the people said.
The deal faced a number of hurdles before the sides reached an agreement.
A creditor group had been calling for its liquidation, saying they would recover more in a wind-down and through lawsuits against ESL for deals it had done with Sears in the past. Lampert has said they were proper.