Sears’ CEO proposes restructuring to avoid bankruptcy

Sears is running out of
cash.
Business Insider/Jessica
Tyler

• Sears is
  teetering on the edge of bankruptcy. 
• In a proposal made public on Monday, Sears CEO Eddie
  Lampert said he wants creditors to restructure about $1.1
  billion of debt coming due in the next two years and asked
  Sears’ board to sell $1.5 billion of real estate and
  divest $1.75 billion of assets.
• “Sears now faces significant near‐term liquidity
  constraints,” states a filing on the proposal.
• Sears has been
  closing stores and
  selling off assets following
  years of crippling sales declines. 

Sears
is running out of cash, and its CEO is scrambling to keep the
company afloat.

In a proposal made public on Monday, Sears CEO Eddie Lampert laid
out a plan to give the company a short-term cash infusion and
extend deadlines for debt repayments.

Specifically, he wants creditors to restructure about $1.1
billion of debt coming due in the next two years. He has also
asked Sears’ board to sell $1.5 billion of real estate
and divest $1.75 billion of assets.

“Sears now faces significant near‐term liquidity
constraints,” states a filing on the proposal.

Wall Street analysts have predicted for years that Sears is
imminently going bankrupt. But the retailer has managed to stay
afloat with loans from Lampert, the sale of valuable real estate,
and the slow dismantling of its exclusivity over some big
American brands.

But Sears’ options are now running out, as the company’s
sales continue to plummet amid mass store closures. 

The company has cut
its store count in half within the past five years, to
894 stores as of May 5, down from 1,980 stores in 2013.

Sears has also been systematically trimming its corporate
workforce. The company has cut roughly 420 corporate jobs this
year, following two rounds of cuts last year totaling more than
500 jobs.

Sears disclosed last year that its corporate headcount at Hoffman
Estates and a nearby satellite office had fallen to fewer than
4,250 workers from 5,444 employees in 2015.