Sears bankruptcy claims Milford department store
Sears Holdings will close more than 140 Sears and Kmart stores nationally, including its Connecticut Post mall store in Milford and a location in Waterford, after the iconic retailer declared bankruptcy Monday, Oct. 15.
Controlling shareholder Ed Lampert is stepping down as CEO while remaining chair of the board, and offering $300 million in new financing via his ESL Investments hedge fund to help Sears stay afloat, with ESL long based in Greenwich before relocating to Miami in 2012.
Hoffman Estates, Ill.-based Sears filed for Chapter 11 protection from creditors in the U.S. Bankruptcy Court for the Southern District of New York, with the goal of closing or selling unprofitable stores and staying in business with those that are cash-positive.
Sears stated the goal of completing store closures near the end of the year. The company is maintaining for now its department store at Danbury Fair mall, and stores in Manchester and Meriden. Sears is in the process of closing a Milford Kmart among more than 45 store exits announced in August.
Sears is one of the original tenants at Danbury Fair, which opened in 1986. In 2016, Sears gave up 70,000 square feet of its lease in the mall to European fashion store Primark. It still operates out of 106,000 square feet.
For Connecticut Post, it is the second major loss of a retailer in the past few years after the departure of JCPenney, with Boscov’s department store stepping in as a replacement.
Sears lists the U.S. Pension Benefit Guaranty Corp. among its unsecured creditors, without stating how much it is owed. Of amounts specified, lenders holding notes administered by an affiliate of BNY Mellon are owed the largest amounts at more than $2.4 billion. The company’s largest Connecticut creditor is the New Britain-based tool giant Stanley Black & Decker, owed $5.9 million, with other household brands owed large amounts including Whirlpool, Frigidaire, Daewoo, Samsung and Cardinal Health.
Under Lampert’s plan, ESL would make a “stalking horse” bid for Sears stores that would allow other would-be acquirers to enter any auction with better offers, with Lampert remaining chair of the board of directors and ESL having a 49 percent equity stake in Sears. Management of Sears day-to-day operations shifts to a committee of Robert Riecker, chief financial officer, and executives overseeing Sears’ digital, customer and apparel operations. Sears also appointed a chief restructuring officer in Mohsin Meghji, a partner of the turnaround management firm M-III Partners.
“Over the last several years, we have worked hard to transform our business and unlock the value of our assets,” Lampert stated in a press release. “While we have made progress, the plan has yet to deliver the results we have desired. ... As we look toward the holiday season, Sears and Kmart stores remain open for business.”
Chris Bosak contributed to this report; includes prior reporting by Jordan Grice.