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| The end of the road for Sears and Kmart. Capitalism killed a legacy. |
The government has been shut down for over two weeks and it seems like there's no end in sight.
Sears and Kmart are officially going out of business. The Sears Holding Group has rejected a last ditch effort by former CEO Eddie Lampert to bring the company from the brink of collapse.
The two companies been in business for decades. They were staples of shopping malls, shopping centers and big box retail.
The company will liquidate as soon as a federal judge approves the agreement. That means the shareholders will end up getting their golden parachutes and the 50,000 employees will not see a paycheck or their long overdue earned benefits.
I've talked about the demise for years. Now it's a sad moment in modern history.
Are you going to miss Sears and Kmart?
Sears, which also owns Kmart, planned to announce its liquidation plans Tuesday morning, the people said.
Lampert had put forward a $4.4 billion bid to save Sears by buying it out of bankruptcy through his hedge fund ESL Investments. His offer, though, was deemed insufficient by Sears' advisors, the people said. One of the biggest unresolved issues was covering the fees and vendor payment it owes, making it "administratively insolvent."
Still, ESL plans to protest Sears' decision, a person familiar with the situation told CNBC. ESL, which worked over the weekend to improve its offer, will point to the extensive advisory fees that Sears has racked up during bankruptcy. Such fees are part of Sears' administrative expenses.
Sears on Tuesday morning pushed back a bankruptcy court hearing originally scheduled for 10:00 a.m, allowing for the possibility of a last minute resolution.
The people requested anonymity because the information is confidential.
A liquidation could still salvage pieces of the storied retailer, like its home services business. Still, it marks the end of an era for the company that started in 1893 as Sears, Roebuck & Co., and was once the nation's largest retailer. Its fall from grace saw it swing from being the "first everything store" to a business that couldn't compete when "everything" was found online after Amazon arrived.
Sears plans to liquidate after after 126 years in business Sears plans to liquidate after after 126 years in business.
Sears Holdings has rejected Chairman Eddie Lampert's bid to save the 126-year-old company, setting the storied retailer with more than 50,000 employees on a path to liquidation, people familiar with the situation told CNBC on Tuesday. Sears, which also owns Kmart, planned to announce its liquidation plans Tuesday morning, the people said.
Lampert had put forward a $4.4 billion bid to save Sears by buying it out of bankruptcy through his hedge fund ESL Investments. His offer, though, was deemed insufficient by Sears' advisors, the people said. One of the biggest unresolved issues was covering the fees and vendor payment it owes, making it "administratively insolvent."
Still, ESL plans to protest Sears' decision, a person familiar with the situation told CNBC. ESL, which worked over the weekend to improve its offer, will point to the extensive advisory fees that Sears has racked up during bankruptcy. Such fees are part of Sears' administrative expenses.
Sears on Tuesday morning pushed back a bankruptcy court hearing originally scheduled for 10:00 a.m, allowing for the possibility of a last minute resolution.
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| Iconic brands Sears and Kmart are gone. |
A liquidation could still salvage pieces of the storied retailer, like its home services business. Still, it marks the end of an era for the company that started in 1893 as Sears, Roebuck & Co., and was once the nation's largest retailer. Its fall from grace saw it swing from being the "first everything store" to a business that couldn't compete when "everything" was found online after Amazon arrived.
It will be what many deem the ultimate proof of failure in Lampert's grand plan to fortify two struggling retailers, Sears and Kmart, by combining them in 2005. The combined companies became victim of savvier competition, changing shopping habits and, many have argued, poor management.
Lampert's background as a hedge fund manager, once deemed the next Warren Buffett, proved to be poor preparation for battling retail titans like Walmart, Target and Amazon. Lampert believed that a strong loyalty program and data made investing in stores and advertising optional, people familiar with the situation have said. As Sears' losses piled up, it didn't have a choice, it couldn't invest.
Sears' last profitable year was in 2010. For the past five years, the ratio of Sears' capital expenditures to sales has been less than 1 percent, even as its sales have more than halved in the same time period.
Without proper attention, Sears lost relevancy and its customers' loyalty.
Sears had a little under 700 stores when it filed for bankruptcy in October, but it has since whittled that down to an expected footprint of roughly 400. It employed 68,000 workers at the time of its filing.
ESL declined to comment. Sears did not immediately respond to requests for comment.
Yeah, it is sad that I see iconic brands like Kmart and Sears go under. I wished the situation would have turned around. Their leadership should have been more diverse to the consumer.
Lampert destroyed two companies. He along with folks like Trump, Sen. Mitt Romney (R-UT) and hedge fund investors pile debt on companies like Sears. They loan companies billions knowing that a company can't pay for the debt. Then they reek in the profits while the company struggles on pennies.
Sears and Kmart are gone.
Is this going to be Donald J. Trump's fault.
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