Before there was Amazon, there was Sears, which was the blueprint for the business model Jeff Bezos is benefitting greatly from. Ironically, the iconic retail chain is now on life support thanks to the booming E-commerce business it paved the way for.
Sears has entered voluntary Chapter 11 bankruptcy proceedings after a decade of struggling. To reduce its debt, the US retailer plans to close up to 150 stores with the hope that move will help the company make it through the holiday season. The company has been dying a slow death since 2013 losing roughly around $5.8 billion after closing 1,000 stores.
Founded in 1892, Sears was best known for selling merchandise through its catalogs sent out throughout the country via the US postal system. The company was at its peak in the 1990s until Target, Walmart and other companies sprouted offering stiff competition. Hedge fund manager Edward Lampert bought the company in 2004 and merged it with K-Mart and under his guidance saw a $1.5 billion profit in 2015 but it was all downhill since then.
Speaking on the decision, Lampert said in a statement:
“The Chapter 11 process will give [Sears] the flexibility to strengthen its balance sheet … continue right-sizing its operating model, and return to profitability,”
Lampert is hoping for a huge turnaround, but recently we saw that is a huge undertaking just ask Toys “R” Us who tried unsuccessfully to reorganize but wound up laying off its all of its employees. Sears currently employs 68,000 people so we hope the retail giant can find a way to stay afloat for them. 100,000 people receive pensions from the company, and they are also could be affected but could be protected by regulators.
Unfortunately, more layoffs and store closes are more than likely going to happen and continue the trend of traditional walk-in retail becoming a thing of the past.
Photo: VIEW press / Getty
Sign O’ The Times: Sears On Life Support, Files For Chapter 11 Bankruptcy was originally published on hiphopwired.com