The uncertainty over the fate of embattled retailer Sears Holdings (SHLD) eased slightly Tuesday after a bankruptcy judge allowed hedge fund ESL Investments, owned by the department store’s chairman Edward Lampert, to go ahead with the plan to acquire the company.
The order came as a big relief for Sears, which has been on the verge of liquidation after all the efforts to salvage it failed. Last week, Lampert’s $4.4-billion offer to acquire the store chain suffered a setback after it faced resistance from the company’s management. Also, there has been no clarity on how he is going to fund the deal.
The crisis took a new turn this week after Sears failed to pay the bankruptcy expenses to its legal consultants, and the management decided to inform the court about its objection to Lampert’s offer.
The order came as a big relief for Sears, which has been on the verge of liquidation after all the efforts to salvage it failed
As per the court’s directive, ESL has to deposit $120 million before Wednesday evening to avoid the liquidation process. The next step will be the auction, to be held early next week, at which ESL will compete with the other bidders, which will be followed by the final approval by the court by month-end.
The downfall of Sears is a classic example of how traditional American retailers are being crushed by the growing competition and the rapid adoption of e-commerce, an area dominated by Amazon (AMZN) and Walmart (WMT). Experts are of the view that more Sears stores will be closed soon, irrespective of the final outcome of Lampert’s acquisition bid.
Being unable to operate its remaining outlets, which once formed part of a huge store network, the company was forced to file for bankruptcy protection in October last year. Of late, the more-than-a-century-old retail store chain has been rapidly shrinking amid operational losses and mounting debt.
When Lampert came up with the initial offer of $4.6 billion in early December, it was seen as the last chance for Sears to survive. The offer also gives some hope to suppliers and lenders who are currently apprehensive about the future of the company.
Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips
Most Popular
CCL Earnings: Highlights of Carnival Corporation’s Q4 2025 results
Cruise operator Carnival Corporation & plc (NYSE: CCL) on Friday reported an increase in revenue and adjusted earnings for the fourth quarter of fiscal 2025. Earnings topped analysts' expectations. Revenues
Lamb Weston (LW) Q2 2026 Earnings: Key financials and quarterly highlights
Lamb Weston Holdings, Inc. (NYSE: LW) reported its second quarter 2026 earnings results today. Net sales inched up 1% year-over-year to $1.62 billion. Net sales at constant currency remained flat.
Paychex reports higher Q2 FY26 revenue and earnings; EPS beats estimates
Paychex Inc. (NASDAQ: PAYX) on Friday reported stronger-than-expected adjusted earnings for the second quarter of fiscal 2026. Revenues grew 18% year-over-year. The Rochester-based human capital management solutions provider reported revenues
Comments