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Sears files for bankruptcy - swan song for a USA icon

Sears files for bankruptcy - swan song for a USA icon

Now, all that remains is a rundown Sears outlet warehouse store scattered along the railroad tracks in an industrial neighborhood alongside the Allegheny River in Lawrenceville.

Sears Holdings Corp CEO Eddie Lampert has stepped in to contribute towards a financing package of between US$500 million and US$600 million that the USA department store operator was close to securing on Sunday (Oct 14) to fund operations during bankruptcy proceedings, people familiar with the matter said.

Rick Green and Dawn McCarty, Bloomberg •.

Since acquiring then Troy-based Kmart Corp. out of bankruptcy in 2005 for $11 billion, Sears has closed hundreds of stores and sold off several divisions.

Sears is planning to seek bankruptcy protection in NY as soon as Sunday night, though a court filing could slip into Monday, the sources added, asking not to be identified because the negotiations are confidential.

In a statement released by the Sears, the company is looking for a buyer for its remaining stores. Plus, Sears also has to pay its current vendors and employees and stock up inventory before the holidays. However, the company now has too much debt and not enough shoppers. Walmart Inc. supplanted Sears as the biggest retailer in the early 1990s.

It was the largest USA retailed until the rise of Walmart in 1989. Lampert, who is Sears's biggest shareholder and will remain as chairman, acknowledged in the statement that turnaround efforts so far have fallen short.

A spokeswoman for the mall's parent company, Washington Prime Group Inc., on Friday said the mall is in "active negotiations to transform" the space. The final straw was a $134 million debt payment due Monday that it could not afford.

ESL held about US$2.5 billion in Sears debt as of September, the result of multiple attempts to keep the chain afloat.

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Yes, Sears Auto Centers remain open, though Sears has announced the closure of certain locations.

If Sears does file for Chapter 11, the company could try to stay in business, using the court process to shed debt and unaffordable leases.

The struggling retailer has been losing market share for years, but its Kmart and Sears chains still generate about $14 billion in annual sales.

In the event that reorganizing fails, Sears may end up having to liquidate.

The company was started by Richard Sears, a train station agent in Minnesota who began selling watches by mail in 1886, according to the company's website. Sears moved to Chicago in 1887, and he hired watchmaker Alvah Roebuck as his partner.

The Sears catalog eventually sold products ranging from hardware and automobiles to kits for building an entire house.

Sears' stock has fallen from about 6 United States dollars over the past year to below the minimum 1 United States dollar level that Nasdaq stocks are required to trade in order to remain on the stock index.

Neil Saunders, managing director of GlobalData Retail, said Sears' troubles stretched back to the 1980s when it became "too diversified and lost the deftness that had once made it the world's largest and most innovative retailer".

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