Sears wins reprieve from liquidation as Chairman Lampert makes last-minute bid on bankrupt company

[Zorro]

Source: CNBC

Department store chain Sears won a reprieve from liquidating Friday after its chairman, Eddie Lampert, submitted a bid in an effort to buy the retailer and keep it alive, people familiar with the situation tell CNBC.

Lampert's hedge fund ESL Investments put forward his tentative proposal for Sears earlier this month with his formal submission due today.

A bid could help divert liquidation, but may not necessarily. Sears' advisors have until Jan. 4 to decide whether ESL is a "qualified bidder." Only then, could ESL take part in an auction against liquidation bids on Jan. 14. They will weigh the value of Lampert's bid against offers to liquidate the company.

The terms or structure of Lampert's bid could not immediately be determined. If it is similar to the $4.6 billion proposal Lampert outlined earlier this month, it is likely to face push-back from the company's unsecured creditors. As part of the initial bid, which regulators required Lampert to make public, financing would in part stem from $1.8 billion in debt that Lampert would forgive through a so-called "credit bid."

Read more: https://www.cnbc.com/2018/12/28/sears-chairman-eddie-lampert-submits-bit-for-company.html

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Sears is hanging on by its fingernails, and their 68,000 employees may soon be out of work.

[NickB79]

1. I saw they're closing the Sears at the Mall of America

That's a huge deal; the MOA store is a flagship of their brand.

[kimbutgar]

2. I went to sears today and talked to a worker who said she thinks her job was safe.

Might buy a mattress there tomorrow the deals are really good.

[ancianita]

3. Sears did at least as much for America as the auto industry. It should've been the original Amazon.

It catalogued Americans' access, through mail order, to everything from underwear to homes. There are Sears houses still standing in this country.

Most of flyover country got built through Sears.

[localroger]

7. It was the Amazon of its day

...its day being about 50 years ago. A good way to get a sense of the importance of Sears is to watch the classic film Finnian's Rainbow, where a credit account with Sears is the Maguffin of the whole movie.

[ancianita]

10. It was, and should've stayed that way. Amazon got to exist in the red for ten years before

it turned a profit, yet no dissolution.

The auto industry got a bigass bailout.

But Sears? Dissolution.

Interesting reference to Finian's Rainbow or a Maguffin, but I've no clue about them, though I've looked them up. I'll check out the movie, thanks.

[localroger]

13. In any film, the "maguffin" is the goal

It's the kid that needs to be saved, the treasure to be found, etc. Finnian's Rainbow is a movie from the heyday of the civil rights movement where the maguffin is either naturally metholated tobacco, or an actual pot of gold, or the salvation of its heroine, or a line of credit at Sears or, really, racial equality.

[ancianita]

16. Thanks. I taught film for ten years and never came across that one. Much appreciated.

I looked the movie and the term up, and decided I have to see the movie to see how they come together.

[Aristus]

25. The term, if not the concept, originated with Alfred Hitchcock.

His definition of the mcguffin was an object of no real importance, but one that nevertheless motivates the characters and keeps the story moving.

[sfwriter]

19. Sears was seriously mismanaged.

It became a consumer credit company and shed its catalog business, placing a bet that people wouldn't buy things from their living rooms anymore. It doubled down on the consumer credit position at exactly the wrong times as well.

Private equity gutted Sears at a time Amazon was playing an in-house, close-to-the vest game that shut these "titans of Wall Street" out. That forced Sears to double down on profit maximization over building a functional business. There is a reason they have closed stores every year for years now.

[ancianita]

20. I'm aware. I'm not saying Sears is due any sympathy, and I know "It's just business" is a thing.

Sometimes, rather than have capitalism de-institutionalize the country with "free market" values that disrupt, I entertain a silly notion that Main Street capital entities themselves might have enough historical significance to become institutions of mainstream culture, rather than transactional profiteers.

The worker and management have nothing in common.

[sfwriter]

28. Do you know the term "creative destruction?"

It is the term economists use to describe what you are talking about. I, for one, don't enjoy being creatively destroyed to make someone else rich. It comes from the theory that efficiency is borne by technology cycles that, by necessity, require the destruction of the preceding order.

The classic analogy is that traditional agriculture had to die to make the Illinois Central profitable. Railroads erased traditional economies, shifting the previous agricultural model to one of commodity production and trading.

It's not just that management has nothing in common with the worker, they have no relationship with the entire existing order from consumer all the way back to field or mine or drawing board. It is all abstractions, and you are correct, it should be a crime.

[ancianita]

29. I do know that term. I think it's what Romney's Bain Capital was about. Who decides it's a crime are

those in the House who fight current corporate law.

I doubt anyone but the junior members would even consider it.

AMEN to the best thing I've read in DU lately:

It's not just that management has nothing in common with the worker, they have no relationship with the entire existing order from consumer all the way back to field or mine or drawing board. It is all abstractions, and you are correct, it should be a crime.

[gay texan]

11. I have a metal lathe sold by sears/craftsman in the 1960's

It's still going to this day...

[calguy]

15. They could have been the Amazon of today

But management was complacent. Times changed and they didn't change with it.

[brush]

26. CEOs are paid big money to anticipate trends and guide their corps...

with the right decisions. Sears' CEOs missed it by not adapting their catalog to the internet. If they had, Amazon would never have existed.

Hope Lampert is the real deal and will save the company. It's up in the air though IMO since he's working with a hedge fund that might just be out to strip the company's assets and raid it's pension fund.

We'll see.

[ancianita]

30. Let's hope. One never knows when it comes to management or Bain Capital types.

[guruoo]

4. He'll finish selling off of the remaining assets, pocket the dough and the

name, and then walk away.

[SharonAnn]

14. Yep, exactly. That's been talked about for some time. Lining his pockets.

[mwooldri]

5. There's plenty parts of Sears that make money.

I joined Sears Home Improvement Products early December. My part of Sears is to be sold to service.com... the appliance repair business makes money (Sears does the repair work for Home Depot, Lowe's and others under the A&E brand). IMO K-Mart killed Sears. That and some other business decisions too...

[Delarage]

22. I had great experiences with the Sears appliance repair

people....I like to try to fix things myself, and there are about 85,000 parts on a typical washing machine, for example. They were always super-helpful in finding parts quickly and cheaply.

I like Sears and Kmart and the whole thing is sad

[flyingfysh]

23. Sears had the worse appliance repair service I ever had to deal with

First, it would take several days to get someone in to fix the dishwasher. Then when someone finally got here, he would say he needed a part, it had to be ordered. Then several days later, the same thing all over again. Once they refused to fix a stove at all, even though I had paid for a service contract. They seemed completely unable to fix appliances they sold.
Later when I had an issue with an appliance from Lowe's, someone came by the next day.

I think some Sears manager must have been judged by how little money he could spend on repairing customer appliances.

[Delarage]

24. I guess I meant their self-service parts dept.

I usually fix things myself, and they were super-helpful with those kinds of projects. I never get anything fixed in a day, though, so not sure how they'd be if it was an emergency (sounds like you're saying "not good"--LOL).

[ancianita]

31. I always experienced that they had not only the longest lasting appliances, but best repair.

[Raine]

34. Up til the early 1980's my father repaired Washers and dryers for Sears

he was really good at his job he spent as much time as needed to do the repair right to the customer's satisfaction. My father was so good that the "brass" as he called the bosses would get after him for doing too good a job and taking too long. The "brass" wanted him to get in and get out put quantity over quality. My father asked them how often there was a call back on a repair he had done that had to be redone, they admitted never. Anyway my father continued doing the good job he'd always done and taking his time about it, he got no more gripes from the "brass".

[MountCleaners]

6. I was at the mall yesterday...

And Sears had the cutest blouses and jackets, as much as 60% off! The other stores were full of trash. Very tasteful and work-appropriate. It's a shame.

[at140]

8. Sears as a company could go bankrupt and close but

it has retail infra-structure in place, so some other outfit will
buy those and most employees will work for the new outfit.
Mostly the management types have the most job loss risk.

[Liberty Belle]

9. I used to love the Sears catalog as a child.

There weren't many catalogs or big retail stores back then, and it was a joy to filp through the whole thing and look at all the amazing things on nearly every page.

Our local Sears closed a few months ago. It really made me sad. I bought an Oriental rug at the going out of business sale. Thr nearest Sears now is nearly an hour away.

Across America, back in the 1800s a lot of people ordered kit homes through Sears Catalog. There are still a lot of them standing including here in San Diego. It was truly where America shopped.

The refrigerator I bought there outlasted all our other appliances. In the old days they built them to last, but no longer. That also helped doom them.

At some point they weren't trendy enough to compete against all sorts of other retailers and online shopping sites. Now I hear that JC PEnney is in trouble, too. I'll be doing more shopping there hoping it can be saved.

I suspect Sears will be liquidated but hope I'm wrong and that the owner will find a way to have it make a comeback or at least stay around as a catalog and online retailer.

[radical noodle]

18. We live a couple of miles from a Sears store

It's mostly appliances and tools, but there are several employees there who I hope can keep their jobs.

[KWR65]

12. Lampert is a Libertarian Jerk

Good lord. Investors get what they deserved by having a jerk at the helm of the Sears/Kmart ship.

[radical noodle]

17. This makes me so sad

I grew up with everything Sears. My dad bought all his tools there and my mom's appliances were always Sears. Her sewing machine was from Sears. I learned to cook and sew on all things Sears/Kenmore. When I needed new appliances four years ago when we remodeled, all my appliances were purchased from Sears. I hope they can make something work.

[Bengus81]

21. Closing the Sears at Towne East Sq in Wichita next year--last Sears store in Kansas

When that mall was built in 1975 it was one of the huge anchors that malls like that have to have signed up before construction can start. The others were Dillards,JC Penny then you go after all the smaller chain stores.

Sears will be studied forever on how a HUGE Corporation can make so many mistakes to bring it down.

[keithbvadu2]

27. Sears is surely going down and Lampert is doing a contr.olled burn to maximize the return to himsel

Sears is surely going down and Lampert is doing a contr.olled burn to maximize the return to himself

[ancianita]

32. Fuck capitalists like Lampert.

[keithbvadu2]

33. And Mitt Romney

[Maxheader]

35. Tough to compete with online commerce..