Does Sears have a shot at new life?
According to a report from Bloomberg, “Cyrus Capital Partners and a hedge fund run by Sears Chairman Eddie Lampert are preparing a potential joint takeover bid that would keep the bankrupt chain alive.” The report, based on comments from unnamed sources, said that “the prospective suitors may offer to swap debt that they hold for ownership of the stores in a so-called credit bid.”
A bankruptcy court would have to approve such a takeover, “and competing bids from other suitors are still possible, including one that would liquidate the company,” Bloomberg said.
Earlier in November, the retailer was reportedly putting the finishing touches on a deal for $350 million in financing with Great American Capital Partners, along with other lenders. The potential deal could bring the retailers’ financing package up to $650 million, with $300 million in loans pledged by bank lenders, Reuters reported.
In October, Sears Holdings filed for Chapter 11 bankruptcy and prepared to shutter just under 150 stores following decades of declining revenue and hundreds of store closures. In its Chapter 11 filing, Sears reportedly listed $6.9 billion in assets and $11.3 billion in liabilities. The bankruptcy filing was the culmination of years of effort on the part of Sears and Chief Executive Officer Eddie Lampert to turn around the company.
Lampert had long vowed to bring Sears back to its glory days when it was a leading retailer, but his efforts failed to resonate with consumers. Sears hasn’t had a profit since 2011, and Lampert has faced criticism that he let the retailer’s brick-and-mortar stores deteriorate. Over the years, Sears has sold its Craftsman brand and was reportedly mulling an offer for the Kenmore appliance brand.