Sears shares are lower in out-of-hours activity Monday, as the US retailer has filed for Chapter 11 bankruptcy protection. Sears’ CEO, Eddie Lampert, meanwhile, is stepping down, although he will remain Chairman of the Board.
Sears has also appointed a Chief Restructuring Officer to support the business during this period.
Sears shares ended the US Friday trading session 18.97% higher at $0.41. However, the stock is currently over 16% lower in out-of-hours trade.
Sears files for bankruptcy protection
Earlier Monday, US retailer Sears, which has been trading for 125 years, filed for Chapter 11 bankruptcy protection. Sears, which also owns and operates Kmart, said that operations at its physical and online stores will continue as usual.
The US retailer has struggled to remain profitable amid the increase in popularity of online stores, including Amazon. It had already announced that 46 of its unprofitable stores would be closing in November this year. Sears said Monday that a further 142 Sears stores will be closing by the end of the year.
“Over the last several years, we have worked hard to transform our business and unlock the value of our assets,” Sears Holdings Chairman, Edward S. Lampert.
“While we have made progress, the plan has yet to deliver the results we have desired, and addressing the Company's immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer,” Lampert said.
The Chairman added that the Chapter 11 protection would give the firm flexibility as it engages in a complete restructure process.
Following Lampert’s decision to step down as CEO, the Board has appointed an ‘Office of CEO’, to manage the day-to-day operations of the business. It is made up of:
- Chief Financial Officer, Robert A. Riecker.
- Chief Digital Officer, Leena Munjal.
- Customer Experience and Integrated Retail.
- President of Apparel and Footwear, Gregory Ladley.
In addition to those management changes, Sears has appointed a Chief Restructuring Officer, Mohsin Y. Meghji, Managing Partner of M-III Partners.
“Meghji is a nationally recognized US turnaround professional with a track record of revitalizing companies experiencing financial, operational or strategic transitions to maximize value for stakeholders,” Sears said.