Sears, once a retail titan, files for Chapter 11 bankruptcy

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Its debt to Pension Benefit Guaranty Corp, a US government agency overseeing the retirement benefits of former Sears workers, was not disclosed in the bankruptcy filing.

Sears Holdings Corp., the 125-year-old retailer that became an icon for generations of American shoppers, filed for bankruptcy, saddled with billions of dollars of debt racked up as it struggled to adjust to the rapid shift toward online consumption. Negotiations over the fate of the fallen company have been continuing this week, as it faces a critical $134 million of debt that is maturing on October 15. Paula Rosenblum, co-founder of Retail Systems Research, wrote in Forbes that Lampert would emerge from a Sears bankruptcy as the least-sympathetic victim and perhaps the largest beneficiary.

The iconic American retailer, which has seen sales cut in half since 2014, announced it would close 142 stores before the end of year and that CEO Eddie Lampert will step down.

The company said it meant to reorganize around a smaller store platform, a strategy it said would help save tens of thousands of jobs.

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The chain, which comprised 863 mall-based stores and an additional 1,200 retail locations in the year 2000, had 866 Sears and Kmart stores as of August 4 and expected to close 149 of them in the second half, according to a September 13 filing. Lampert gave up his title of chief executive officer as part of the filing. The company will now be run by three of the company's top executives.

Meanwhile, Sears and Kmart stores are open for business.

Reuters first reported on Thursday that Lampert was exploring bidding for some Sears assets. It involved selling Sears's real estate to help pay down borrowings. Only a handful of full Sears and Kmart stores remain in MI. Lampert, who is Sears's biggest shareholder and will remain as chairman, acknowledged in the statement that turnaround efforts so far have fallen short. While losing the retail battle with Walmart, Home Depot and others, it was flanked on another side by Amazon's rapidly growing e-commerce business.

If Sears ends up collapsing, the obituaries will blame Internet competition for undermining the big-box department store model. Plus, in bankruptcy proceedings, the largest creditors become the owners of the new entity. The holding company has closed almost 3,000 Sears and K-Mart locations over the past decade and are now down to fewer than 1,000 retail locations.

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Still, some suppliers said they negotiated favorable payment terms well ahead of news that it could file for bankruptcy, so they're continuing to ship goods.

For generations, Sears served the middle market of working-class homeowners hoping to buy high-quality products, but who could not afford to make the purchases outright without Sears monthly installment programs. The Craftsman brand of lawn equipment and tools has been sold.

In the latest round of what it calls "streamlining" efforts, Sears has announced major measures to continue to try to move the company forward.

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