It was inevitable, but feels shocking and weird all the same: Sears is bankrupt. If its lenders get their way, it soon will be no more. What was once the world’s largest retailer, the place where everyone went to buy everything and have awkward family photos taken in the meantime, and which has since withered to a skeleton crew of 700 (going on 500) empty, dirty and depressing stores, will soon be but a memory, a footnote in the histories of its children Land’s End and Craftsman and probably eventually Kenmore, brought low by the Walton family, Jeff Bezos and a weirdo hedge-fund manager who was college roommates with our current weirdo Treasury Secretary.
That hedge-fund weirdo, Eddie Lampert, didn’t want this day to come, at least not this soon. He was more than happy to continue what has to rank as among the worst CEO performances in history, both because his hedge fund was collecting a healthy coupon on the billions in Sears debt it owns, and because bankruptcy court could prove quite unpleasant for him. And Eddie’s not giving up on his dream of an all-but-impossible future that involves Sears in some way.
Mr. Lampert’s hedge fund, ESL Investments Inc., is in talks to provide another $300 million junior bankruptcy loan that would provide additional cash for the retailer’s business….
“Everything I have done as an investor in Sears Holdings has been with the goal of helping the company and its people succeed,” Mr. Lampert said in a statement provided by his hedge fund.
Mr. Lampert said his hedge fund will continue to press for Sears to emerge from bankruptcy in a stronger position. “I invested so much of my time and money in the company because I believe Sears has a future,” he said.
He is gonna stop being CEO, though. And even if Sears, as seems like, should not survive, Lampert is ready to continue feasting on its entrails and thrive.
Mr. Lampert believes the company can reorganize around roughly 300 of the most profitable stores, a person familiar with his thinking said. However, this person said, it is possible even those stores will eventually be sold.
Even in bankruptcy, Mr. Lampert will have great sway over the company’s fate. His hedge fund owns about 40 percent of the company’s debt, including about $1.1 billion in loans secured by Sears and Kmart properties. As a result, he could force Sears to sell the stores or transfer them to him to repay that debt.
“Lampert will make out,” said Mr. Olbrysh, the retired Sears worker. “There is no question about that.”
Sears Files for Chapter 11 Bankruptcy [WSJ]
Sears, the Original Everything Store, Files for Bankruptcy [NYT]
Earlier: Sears Is Screwed, But Eddie Lampert’s Gonna Be OK; Sears Still Screwed, Eddie Lampert Still Gonna Be Fine; Sears Still Very, Very Much Screwed, Eddie Lampert Still Very Much Going To Be Better Than OK