Washington: Historic but failing US retail chain Sears got a reprieve on Wednesday after a billionaire hedge fund manager won an auction to keep the remaining stores alive -- for now, according to reports.
Edward Lampert, who steered the company into bankruptcy last year in order to restructure it, won the bid to buy the remaining assets, beating out others who would have killed off the brand, according to news reports.
The deal with Lampert’s ESL hedge fund could keep up to 50,000 people in work and 425 stores open, but requires approval from a bankruptcy court.
Lampert, who stepped down as CEO but remains Sears’ chairman, reportedly won out after he boosted his bid to $5.3 billion from $4.4 billion following several weeks of negotiations.
Lampert had taken the company into bankruptcy in October, saying that would give the company the “flexibility to strengthen its balance sheet" and enable it to accelerate a strategic transformation.
Sears said it intended to reorganize around a smaller store platform, a strategy it said would help save tens of thousands of jobs.
But industry analyst Neil Saunders of GlobalData Retail was skeptical about the plan given the challenges in the retail market.
“While there is no doubt that a shrunken Sears will be more viable than the larger entity which struggled to turn a profit, we remain extremely pessimistic about the chain’s future," he said in a commentary.
“In our view, Sears exits this process with almost as many problems as it had when it entered bankruptcy protection. In essence, its hand has not changed and the cards it holds are not winning ones."
Founded in 1886 as a mail order catalog company, it went on to pioneer the department store industry, selling all things to all people, and by the mid-20th century had built a vast empire that stretched across North America.
But in recent decades the company struggled in a quickly shifting retail environment, battered by competition from big-box stores and then by the meteoric rise of Amazon and other e-commerce players.
The company been drowning in debt exceeding $5 billion and closed 190 stores last year.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.