AuthorTopic: Official Death of Retail Thread: Life Without Walmart  (Read 28424 times)

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
Re: Official Death of Retail Thread: Life Without Walmart
« Reply #210 on: October 15, 2018, 09:57:12 AM »
Quote
Lampert, who is also the company’s largest shareholder and lender, is hoping the deal, combined with a program of divestments, will give Sears a fighting chance to escape liquidation ahead of the key holiday shopping season, the sources said. Big banks, including Bank of America Corp, Wells Fargo & Co and Citigroup Inc, are expected to provide significant portions of the financing, the sources added.

I don't understand why ANY of these entities would pony up additional FRNs for Fast Eddie's looting scheme. Unless they get a taste.
There's no dealing like self-dealing.

Because they hold shares.  They don't want to lose the equity value, so they float more loans to keep the Zombie going.  It's the essence of "Too Big to Fail".

RE
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Even More Stores To Close - Sears Bankruptcy Update
« Reply #211 on: October 30, 2018, 03:33:19 AM »
https://seekingalpha.com/article/4215540-even-stores-close-sears-bankruptcy-update

Even More Stores To Close - Sears Bankruptcy Update
Oct. 29, 2018 3:40 PM ET


About: Sears Holdings Corporation (SHLDQ), Includes: WHR

WYCO Researcher
Special situations, research analyst, value, long/short equity
(1,773 followers)
Summary

A large number of additional store closings could be announced by November 1 in the second round of closings.

More vendors are demanding reclamation of their goods-including Whirlpool.

I attended the lastest hearing in White Plains.

The lawyer for Sears asserted in court that their liquidity is currently better than expected.

More Sears and Kmart store closings could be announced by November 1 as part of the “Secondary Store Rationalization”, which could also mean additional store leases will be rejected by Sears Holdings (OTCPK:SHLDQ). More vendors, including a filing by Whirlpool (WHR) (docket 326), for the reclamation of their goods. I attended the October 25 hearing in White Plains and provide some details below.
Second Round of Store Closings

According to the DIP loan agreement (docket 7 page 33 of 307), Sears has developed a “Go Forward Plan” that includes plans to close stores under the “Initial Store Rationalization” and close additional stores under a second round. (Secondary Store Rationalization). When Sears filed for bankruptcy they announced 142 stores would close. As the DIP agreement states:

    “No later than November 1, 2018, the Debtors will file a notice, pursuant to the GOB Procedures, to commence a second round of store rationalizations in accordance with the Store Footprint Plan.”

It goes on to state, they “will file a motion no later than November 20, 2018 and will obtain an order from the Bankruptcy Court no later than December 15, 2018 authorizing the rejection of any leases associated with stores included in the Secondary Store Rationalization.”

I was expecting Judge Drain would ask about the second round store closings at the October 25 hearing, but there was no discussion about this in open court. I was hoping to get some indication about the number of additional closings-if any. There were 687 stores at the time of the filing and CFO, Mr. Reicker, stated (docket 3) that 400 stores were EBITDA positive. That could seem to indicate that about 145 or more stores could close in the second round. (687-142=545; 545-400=145).
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
Big Surprise here.  ::) Moar great Capitalism at work...

RE

Sears boss Eddie Lampert accused of possibly profiting from retailer's decline
Nathan Bomey, USA TODAY Published 1:20 p.m. ET Nov. 6, 2018 | Updated 3:50 p.m. ET Nov. 6, 2018


Sears, once America's most famous retailer, continues to fail
 Fullscreen
Customers enter and leave the Sears store in St. Eustache, Quebec. July 21, 2017. Ryan Remiorz, The Canadian Press VIA AP
XXX SEARS-HOLDINGS,-EDDIE-LAMPERT.JPG A

(Photo: Sears Holdings)
CONNECTTWEETLINKEDINCOMMENTEMAILMORE

Sears Holdings chairman and investor Eddie Lampert may have profited from the company's plunge into bankruptcy, a group of creditors alleged Tuesday.

A committee organized to represent the retailer's unsecured creditors in court accused Lampert and his hedge fund ESL Investments of potentially structuring deals to gain an unfair edge as the company declined.

They "may have exercised undue influence to siphon value away from the Company on favorable terms," the creditors group said in a court filing.

The group also said Lampert may have leveraged his "insider status to obtain an ever-increasing percentage" of Sears debt, allowing him to "obtain beneficial positions" in the retailer's Chapter 11 bankruptcy.

USA TODAY reported in June that Sears was giving Lampert and his funds about $200 million to $225 million per year in debt payments.

Sears representatives declined to comment.

Lampert's ESL said in a statement that the hedge fund "has consistently supported Sears Holdings in its efforts to transform and return to profitability during a period of rapid change and disruption in the retail industry."
By Quaker
Maple-Pumpkin Overnight Oats
See more →

"We have every confidence that all transactions involving ESL and Eddie Lampert are valid and enforceable, based on fair and reasonable terms, which were approved by independent directors who were advised by independent financial and legal advisors and featured other appropriate corporate governance procedures," the hedge fund said. "Any legal claims that attempt to challenge these transactions will have no merit and we will defend ourselves vigorously against any asserted claims."

Lampert, who served as CEO from 2013 through the company's bankruptcy filing last month, extended billions in financing to Sears. He also holds ownership stakes in various assets formerly owned by Sears, including valuable real estate spun off in 2015 into a real estate investment trust called Seritage Growth Properties.

"No one should be shocked that he is profiting off transactions to lend Sears money —the issue is, were those deals done at arm’s length and at commercially reasonable terms?" said Philip Emma, senior analyst at Debtwire, which provides news and analysis of corporate and municipal debt.

More: Sears, Kmart stores ailing as CEO Eddie Lampert's hedge fund gets hundreds of millions

More: 7 things to know about Sears CEO Eddie Lampert

More: Sears files for Chapter 11 bankruptcy protection, to close 142 more stores

More: Sears store closing list: 142 more Sears, Kmart locations closing in Chapter 11 bankruptcy

The Seritage deal was particularly suspicious, the unsecured creditors group alleged.

The committee said its examination of the deal shows it "appears to be at discounted prices" and that subsequent leaseback deals to Sears carried "unfavorable and burdensome terms" for the struggling retailer.

Sears was paying Seritage $90.8 million in annual rent for 151 leases, amounting to $4.73 per square foot, according to a Seritage public filing.

Seritage representatives were not immediately available for comment Tuesday.

The creditors group is asking a judge to force Sears to give up documents related to the deals in question, including $2.4 billion in debt held by Lampert through his investment funds, including ESL.

Debtwire's Emma said creditors typically pull all available levers in bankruptcies in an attempt to get paid. So it's "not unexpected" that they would make these accusations given Lampert's history of lending to Sears.

What's "pretty unusual," he said, is that Lampert is acting simultaneously as debtor, investor, lender, landlord and vendor.

Sears filed for Chapter 11 bankruptcy protection in October, hoping to shed debts and close more than 180 unprofitable stores in a bid to stay open as a smaller company. It had 687 stores when it filed, including its Kmart discount stores.

Lampert's ESL owns nearly 50 percent of Sears. He engineered the company's tie-up with Kmart in 2005 and has served on its board since. He gave up the CEO post when the company filed for bankruptcy.

In the final months leading up to the Chapter 11 filing, Lampert proposed that his hedge fund buy Sears appliance brand Kenmore, but a deal never happened.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
Another 40 Sears, Kmart stores closing: See the map
« Reply #213 on: November 08, 2018, 09:30:26 PM »
Another profitable day for Fast Eddie.  ::)

RE

Another 40 Sears, Kmart stores closing: See the map
Nathan Bomey, USA TODAY Published 4:04 p.m. ET Nov. 8, 2018 | Updated 7:14 p.m. ET Nov. 8, 2018

With Sears filing for bankruptcy and so many stores closing, the end may be drawing near for the iconic American retailer. Many of us aren't ready. USA


(Photo: Kelly Tyko, TCPalm via USA TODAY NETWORK)

Corrections & Clarifications: A previous version of this list misspelled the name of a city.

Sears Holdings is closing another 40 stores as it aims to survive Chapter 11 bankruptcy.

The latest move affects 29 Sears and 11 Kmart locations.

The retailer is already in the process of closing about 188 stores: 142 announced in October that will close around the end of 2018 and 46 announced in August that will close in November.

Taken together, the closures are expected to leave the company with fewer than 500 locations remaining. The company has estimated it has about 400 stores that could be profitable on their own if it survives bankruptcy.

Here's the map of the latest round of 40 stores set to close in February. Sears Auto Store locations alongside these stores are also closing.
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Macy's is making a move that signals the death of department stores
« Reply #214 on: November 15, 2018, 12:04:53 AM »
No more Santa Claus at Macy's Christmas!  :'(

<a href="http://www.youtube.com/v/ibDD8Y3IJrg" target="_blank" class="new_win">http://www.youtube.com/v/ibDD8Y3IJrg</a>

RE

https://www.thisisinsider.com/macys-is-shrinking-its-stores-2018-11

Macy's is making a move that signals the death of department stores as we know them
Mary Hanbury


Macy's is shrinking some of its stores. Jonathan Weiss / Shutterstock.com

    Macy's is shrinking some of its less productive stores and cutting back on staff.
    CEO Jeff Gennette told The Wall Street Journal that he planned to cut down on merchandise so that these smaller locations require fewer employees and that he hoped a more curated assortment would create a better shopping experience for the customer.
    Kohl's has used a similar strategy in the past to stave off store closings.

Macy's has a drastic plan to boost sales in its less successful stores.

In an interview with The Wall Street Journal on Monday, CEO Jeff Gennette said the department-store chain would shrink its less productive stores and cut back on staff at these locations.

Gennette said he hoped that by having less merchandise to wade through, Macy's could create a cleaner shopping environment and ultimately a more desirable experience for the customer.

So far, Macy's is testing the new format at four locations, cutting as much as one-fifth of the total space.

A Macy's representative did not confirm to Business Insider how many stores would be affected. Macy's is due to report quarterly earnings on Wednesday.

These smaller locations will have more self-service options, fewer cashiers, and areas to pick up or return online purchases.

This helps to trim the number of employees required. At one of the test stores, at the Stamford Town Center in Stamford, Connecticut, Macy's has pulled back on the number of employees — including cashiers — by 40%, The Journal reported.

Kohl's has used a similar strategy to fight back against the so-called retail apocalypse. Rather than close stores, it has opened smaller locations of about 35,000 square feet, or about one-sixth the size of a typical Macy's store, as well as shrunk several stores. Often, these spaces are not left empty but encompass other retailers like Aldi, a Kohl's partner.

While Kohl's has largely been praised for this strategy and is now considered an industry anomaly, reporting same-stores sales growth in recent months while its competitors have been forced to close stores, some experts say that shrinking stores is not a solution but evidence that a retailer is not resonating with customers.

"If you've got too much space, it means your brand isn't resonating," Steve Dennis, a former executive at Sears and Neiman Marcus, told The Journal. "It's not a real-estate problem — it's a brand problem."

Macy's is also investing in some of its more profitable locations, launching virtual-reality shopping technologies and rolling out concepts such as The Market @ Macy's, a pop-up store-in-a-store that stocks lesser-known brands.

Read more: Facebook is launching pop-up stores at Macy's in a move that's straight out of Amazon's playbook

Gennette said he believes investment in stores now is crucial after the company took its eye off brick-and-mortar locations to ramp up its e-commerce strategy.

"We were spending the capital and gaining market share in digital," Gennette told The Journal. "But we underinvested in brick-and-mortar. You can't just do one without the other."

That's something the former Sears CEO Edward Lampert was accused of doing during his leadership and that critics say ultimately caused the downfall of the company.
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Bankrupt Sears wins court approval for plans to sell stores
« Reply #215 on: November 17, 2018, 01:02:46 AM »
Fast Eddie Strikes Again!  Capitalism in a Nutshell!

RE

Business News
November 15, 2018 / 1:03 PM / a day ago
Bankrupt Sears wins court approval for plans to sell stores
Jessica DiNapoli

3 Min Read

WHITE PLAINS, N.Y. (Reuters) - Sears Holdings Corp (SHLDQ.PK) won U.S. bankruptcy court approval on Thursday to move forward with plans to stay in business and sell itself, even as it continues to evaluate offers to liquidate its business.


FILE PHOTO: A store closing sale sign is posted next to a Sears logo in New Hyde Park, New York, on Oct. 10, 2018. REUTERS/Shannon Stapleton/File Photo

The 125-year-old retailer, which filed for Chapter 11 bankruptcy last month, faces opposition to its plan to sell from some creditors, who argued in court papers that Sears would be squandering hundreds of millions of dollars by pursuing a sale instead of winding down its business.

To address the creditors’ concerns, attorneys for Sears said the retailer would be considering offers for its business from liquidation firms that sell companies’ assets in pieces and shut them down.

Liquidators won an auction for the assets of sporting goods retailer Sports Authority in 2016 and then sold them off in pieces. Retailer Toys “R” Us decided to liquidate this year, shutting all of its U.S. brick-and-mortar shops.

Ray Schrock, an attorney for Sears, told the court that liquidating Sears right away would destroy value, and potentially lead to the failure of profitable businesses, such as the retailer’s home services division.

“We recognize that we have a tough task ahead to save the company,” Schrock said. Sears employs about 68,000 people.

Sears filed for bankruptcy with its bank lenders promising to give it $300 million in bankruptcy financing. The retailer late Wednesday filed papers with the court showing that it had secured an additional $350 million bankruptcy loan from Great American Capital Partners, an affiliate of liquidation specialist Great American Group.
PG&E shares jump as regulator eases bankruptcy fears

The company faces a mid-December milestone to find a bidder for its approximately 500 remaining stores and other assets. Sears already announced it plans to close about 180 of its stores.

Sears Chairman Eddie Lampert, a billionaire who runs hedge fund ESL Investments Inc, is working “around the clock” with possible lenders to finance a bid to keep Sears in business, according to bankruptcy-court papers.

Lampert, who was Sears’ chief executive until it filed for bankruptcy, has loaned the company billions of dollars over the years, and plans to use some of the money he is owed to finance his offer for company assets, according to court papers.

Reporting by Jessica DiNapoli in White Plains, New York; Editing by Leslie Adler
Save As Many As You Can

Offline Surly1

  • Administrator
  • Master Chef
  • *****
  • Posts: 15463
    • View Profile
    • Doomstead Diner
How vulture capitalists ate Sears
« Reply #216 on: November 17, 2018, 07:46:00 AM »
Quote
Sears Chairman Eddie Lampert, a billionaire who runs hedge fund ESL Investments Inc, is working “around the clock” with possible lenders to finance a bid to keep Sears in business, according to bankruptcy-court papers.

Lampert, who was Sears’ chief executive until it filed for bankruptcy, has loaned the company billions of dollars over the years, and plans to use some of the money he is owed to finance his offer for company assets, according to court papers.

Sure he is. May Fast Eddie rot in hell.

"This is not the way to operate a healthy business. This is the way to extract value."



How vulture capitalists ate Sears

Jeff Spross

Sears, the iconic American retailer, filed for Chapter 11 bankruptcy on Monday. Many analysts are treating Sears' fall as a cautionary tale about imprudent borrowing and failures to adapt — particularly in the face of e-commerce and rivals like Amazon. There is obviously a lot of truth in this.

But there's another piece of the narrative that deserves just as much attention: how Sears was stripped for parts by a Wall Street hedge fund.

If you track the long-term course of Sears' revenue and stock price, the problems didn't just set in with the arrival of Walmart and the big-box stores, or with Amazon and the rise of the internet economy. Instead, the tailspin really started with the arrival of a guy named Eddie Lampert and his hedge fund, ESL Investments.

Lampert had already bought Kmart out of bankruptcy in 2003. And in 2004 and 2005, he engineered Kmart's purchase of and merger with Sears, creating the third-largest retailer in the country at the time. Lampert became chairman of the combined company's board. In 2013, Lampert became Sears' CEO.

Lampert slashed capital investments to try and create a more efficient company. He retooled Sears' structure, so that almost three dozen different business departments — like shoes, home furnishings, or menswear — were each siloed, with their own management team and even their own board. It was a model taken from the hedge fund world, meant to encourage healthy competition inside the company and thus power a better overall business.

"There are a lot of decisions made over a long period of time, including by me, that may not have been always the best decisions," Lampert toldVanity Fair in April. "But I did have a point of view in terms of how shopping habits were going to change." He didn't think Sears could ever compete on the same level with the likes of Bloomingdale's or Nordstrom, and shouldn't have spent money trying. "I don't need to invest in fixtures, but I do need to invest in the features and the experiences," he continued.

But critics contend Lampert really didn't know what he was doing.

Sears invested less than 1 percent of revenue in its own capital needs from 2006 to 2017, compared to 4 percent by Target and Macy's. Many Sears stores were left in rundown shape. And without attractive in-store experiences, the company couldn't springboard customers to its website. Meanwhile, the idea of siloing different departments into competing mini-companies may have worked in finance, where teams are just competing to create investment portfolios. But within the concrete goods-and-services world of Sears, it created a "lord of the flies" atmosphere where sales staff in the same store would refuse to help one another, or fight over ad and shelving space.

Now, one thing Lampert and ESL were able to engineer, at least for a while, was a massive return to shareholders — and Lampert owns nearly a thirdof all those shares himself. (ESL Investments owns another 19 percent.) Sears' profits boomed after the merger, before finally starting to fall around the time Lampert became CEO. The company plowed $6 billion into stock buybacks from 2005 to 2012, temporarily goosing the company's stock price.

Another thing Lampert and ESL did was load Sears up with debt. The company owes $5.6 billion. A lot of that credit was loaned to Sears by Lampert and his various operations. ESL Investments owns 40 percent of Sears' debt load all by itself. Lampert and his fellow hedge funders not only ran the company, and thus made the decision to borrow the money; they lent it the money, and thus benefit from Sears' debt service payments.

Finally, Lampert also had Sears sell off $3 billion of its physical properties in 2015 to a fund called Seritage Growth Properties. Lampert was chairman of Seritage's board of trustees. Sears went from owning its storefronts outright to often having to pay rent to stay in them — rent that, once again, Lampert benefited from.

This is not the way to operate a healthy business. This is the way to extract value. This is a story of corporate spinoffs and financial engineering to suck money out of Sears and into the pockets of Lampert and his fellows. The whole thing bears a striking resemblance to how Bain Capital and other private equity funds cannibalized Toys 'R' Us.

Obviously Sears had other problems beyond Lampert and this type of financial pillaging. Sears' business model and brand are of a bygone era, and it's arguable that nothing could have saved Sears. But Sears' fall is also a lesson in how the people at the top of a corporation can also act as a kind of modern-day viking raiding party, traveling from company to company and pillaging each in turn. "[Lampert] had a puppet board who have never pushed back in any way that anybody has ever seen, and why would they?" Mark Cohen, the former CEO of Sears Canada, told Vanity Fair. "They're all handpicked Eddie acolytes."

None of this is sustainable, of course. You can only bleed a company so much before it dies.

Sales and revenue eventually plummeted, and Sears hasn't turned a profit since 2010. It's closed over 2,000 stores since 2011. Over the last 10 years, the company's market value fell by at least $26 billion, and 175,000 of its employees lost their jobs. The workers and salespeople who remain have seen their take-home pay severely reduced over the last few years. Finally, bogged down by debt obligations, Sears filed for Chapter 11 on Monday.

The bankruptcy will involve closing another 142 unprofitable stores, on top of 46 other closings already in the works, leaving the company with probably around 600 stores remaining. The hope is that going through Chapter 11 will allow Sears to emerge on the other side still intact in some way.

As major holders of Sears' debt — debt that is largely secured, moreover — Lampert and ESL will have enormous sway over how the bankruptcy proceeds. Chapter 11 will either repay the debt they're owed, or transform their debt holdings into new shareholder positions

They ran Sears into the ground, and yes, they'll lose a bunch of money for that. But they'll make a bunch of money, too.

"It is difficult to write a paradiso when all the superficial indications are that you ought to write an apocalypse." -Ezra Pound

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Walmart is trying desperately to contain the Black Friday chaos
« Reply #217 on: November 23, 2018, 08:38:04 AM »
It was bad enough on Wednesday.  You would have to be nuts to go out and brave this shit today.  Stick to online shopping!

RE

https://www.thisisinsider.com/walmart-black-friday-chaos-continues-in-stores-2018-11

Walmart is trying desperately to contain the Black Friday chaos by creating what customers are calling a 'maze' — but photos reveal a wild shopping fiasco
Kate Taylor
14h


walmart shopping black friday Walmart is known for its crowded stores on Black Friday. Gunnar Rathbun/AP

    Walmart has attempted to calm the chaos of Black Friday with new maps and rearranged stores.
    But inside the stores on Thursday evening, things looked as crowded and hectic as ever.
    Some shoppers are complaining that Walmart's creation of a "maze" is making Black Friday shopping take even longer.

Black Friday at Walmart looks just as wild as ever, despite the retail giant's best attempts at calming the chaos.

Every year, Walmart tweaks its Black Friday game plan in an attempt to better deal with the crowds that mob its stores starting on Thanksgiving Day.

This year, adjustments include rearranging stores to funnel customers to registers and highlight popular items. The new arrangements mean new color-coded maps, printed in Walmart's circulars and, for the first time, available for reference on its app. And to avoid lines, customers can check out with certain employees throughout the stores.

Read more: Walmart is eliminating the most dreaded part of holiday shopping

But the revamp hasn't fully solved the Black Friday chaos. A look at social media shows that across the US, Walmart stores — which kicked off sales at 6 p.m. — are as crowded and intense as ever.

Some shoppers said the "maze" Walmart created was part of the problem.

But at least one Walmart Black Friday innovation this year has been welcomed with open arms.

"Check Out With Me," a feature allowing shoppers to check out with employees with mobile devices in the busiest sections of its stores, is a hit with customers — if they can find the workers.

Still, for the most part, chaos — or at least crowds — reigned at Walmart.

But for many shoppers who got their hands on Black Friday deals, the hectic scene was worth it.
More on Black Friday 2018:

    Thanksgiving is killing Black Friday by replacing it
    Black Friday deals sold out at stores like Walmart and Target before Friday even began — and people are furious
    Furious shoppers faced off against crashing websites on Thanksgiving Day — and it reveals a massive evolution of Black Friday shopping
    Walmart says it's offering thousands more deals than last year on Cyber Monday in a direct shot at Amazon's most valuable day
    Walmart shoppers are complaining that stores are running out of iPhones as Black Friday sales begin
Save As Many As You Can

Offline azozeo

  • Master Chef
  • *****
  • Posts: 8286
    • View Profile
Death of Retail - Bayer Slashes 12,000 jobs since Monsanto Marriage
« Reply #218 on: December 04, 2018, 11:24:42 AM »

Bayer, the German drugmaker that bought U.S. seed company Monsanto earlier this year, announced on Thursday the sale of a number of businesses, around 12,000 job cuts and 3.3 billion euros ($3.8 billion) in impairments, Reuters reported.


https://sustainablepulse.com/2018/11/29/bayer-slashes-12000-jobs-as-monsanto-takeover-turns-sour/#.XAbT4eJReM8
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Lampert Is Effectively Paying Nothing Additional For Sears
« Reply #219 on: December 10, 2018, 12:09:35 AM »
Fast Eddie on the Prowl again!  Same victim here.

No surprise to the Diners of course.

RE

https://seekingalpha.com/article/4227313-lampert-effectively-paying-nothing-additional-sears

Lampert Is Effectively Paying Nothing Additional For Sears
Dec. 9, 2018 6:13 PM ET|
45 comments


About: Sears Holdings Corporation (SHLDQ), Includes: UHAL
WYCO Researcher
WYCO Researcher
Special situations, research analyst, value, long/short equity
(1,872 followers)
Summary

Lampert sent his tentative bid for the assets of Sears to Lazard last week.

Lampert/ESL will use a $1.8 billion credit bid to buy the assets without putting in additional cash.

Lampert may use some of his new equity in a new Sears to pay other claim holders.

The new Sears will still have way too much debt.

Current shareholders get nothing.

As expected, Eddie Lampert/ESL has made an indicative bid for almost all of Sears Holdings (OTCPK:OTCPK:SHLDQ) assets in a letter sent to Lazard. He effectively, however, is not really paying anything new for the assets. Many media headlines make it seem like he is proposing to pay $4.6 billion. Sounds impressive. It is not. Based on information currently available, it looks like other Sears shareholders get nothing and the same could happen to unsecured claim holders. He is using a $1.8 credit bid (not cash), using more debt, using some of his new stock, and assuming a very select group of existing liabilities to pay for all the assets.
What Lampert Is Getting

He is not buying Sears Holdings Corp. He is not paying current SHLDQ shareholders anything. He is buying assets under section 363 of the Bankruptcy Code. This is not some type of tender offer for shares that often happens when a non-bankrupt company is bought.

Lampert/ESL is getting the following assets:

    500 (approx.) stores
    Other real estate (headquarters and distribution centers)
    Sears Auto Centers
    Shop Your Way
    Kenmore
    DieHard
    Monark
    Innovel
    Sears Home Service Business
    $1.8 billion inventory and receivables
    Non-debtor assets
    Huge net operating losses to offset future income taxes
    Releases to protect himself from any liability caused by prior/current acts

Cash Paid By Lampert/ESL For The Above Assets

    None

Unusual Assets

Net Operating Losses-An Asset

I covered the 382 exception in a recent bankruptcy article, but if Lampert gets 50%+ of the new equity and there is not another change in control for two years, the New Sears will gain a significant income tax benefit using their large prior net operating losses. These net operating losses are not as valuable after the corporate income tax reduction from 35% to 21% and Sears needs to actually have taxable income for them to be usable, but they still are, however, valuable assets for Lampert.
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Sears will spend $443M to close down 142 stores
« Reply #220 on: December 20, 2018, 02:17:39 AM »
https://nypost.com/2018/12/19/sears-will-spend-443m-to-close-down-142-stores/

Sears will spend $443M to close down 142 stores


Closing stores ain’t cheap.

It will cost Sears $443 million to close 142 stores permanently, the bankrupt department store said in a regulatory filing Tuesday.

The 125-year-old retailer, which filed for Chapter 11 on Oct. 15, expects to lose $81 million in markdowns at those unprofitable stores, $9 million in severance costs, $335 million in lease-termination costs and $6 million in depreciation, among other costs, filings show.

Sears will likely close more stores in the coming months, but chairman Eddie Lampert — who is the company’s largest shareholder — is hoping to acquire and preserve some 500 stores.

Last week, a bankruptcy judge approved Sears’ request to pay out $25.3 million in retention
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Lampert's Bid For Sears Seems To Be In Trouble
« Reply #221 on: December 25, 2018, 01:41:51 PM »
Fast Eddie may not win this one. 🤞

RE

https://seekingalpha.com/article/4230074-lamperts-bid-sears-seems-trouble

Lampert's Bid For Sears Seems To Be In Trouble
Dec. 25, 2018 12:36 AM ET|


About: Sears Holdings Corporation (SHLDQ), Includes: JCP, XCOOQ
WYCO Researcher
WYCO Researcher
Special situations, research analyst, value, long/short equity
Summary

Lampert's/ESL bid was not designated stalking horse status.

Bids are due on December 28.

There were 2 hearings last week, and many more are set over the next 3 weeks.

Much-needed cash could come in from additional sale of intercompany held notes.

The Sears Holdings (OTCPK:OTCPK:SHLDQ) bankruptcy case is shifting into high gear this week, as bids are due on December 28 for its assets. Last week, there were two hearings and a number of critical issues were discussed that impact investors. First, Lampert's/ESL tentative bid was not designated stalking horse status. Second, there was no evidence presented to refute an assertion by a lawyer for a vendor that Sears was “administratively insolvent”. Third, some extra cash may be received from the sale of intercompany held notes based on Judge Drain’s ruling.
Major Setback For Lampert

Lampert/ESL made a $4.6 billion tentative bid a few weeks ago that was evaluated by financial advisers who decided that his bid should not be designated stalking horse status. As I discussed in a prior article, the bid did not include any more direct cash from Lampert. It basically used a credit bid and assumption of certain existing liabilities as the basis for his bid. There were hearings and objection due dates already set that assumed that whatever Lampert bid would be given stalking horse status. It was not. This is major setback for Lampert.

In my opinion, his bid needs to be raised by including cash - a lot of cash. The cash could directly be part of the bid or via a rights offer that would also be open to certain select claim classes. Sears needs cash to pay priority administrative claims, but Lampert's original bid was unclear about how much and from what sources these claims would be paid. A reserve fund of $240 million cash is the current estimate needed.

It is unclear how much, if any, consideration will be given to Lampert’s bid that includes a statement to continue operating and keeping stores open, since he has reputation of closing stores. There was even a recent report on CNBC that he was planning to close 50-80 more stores. These additional closures were widely expected.
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Sears may be down to its last 24 hours. Iconic retailer likely liquidates
« Reply #222 on: December 28, 2018, 05:53:37 AM »
Time to play Taps boys...

RE

https://www.cnbc.com/2018/12/27/sears-may-need-to-liquidate-if-no-bid-comes-in-by-tomorrow.html

Sears may be down to its last 24 hours. Iconic retailer likely liquidates if no bid comes in tomorrow.


    The company's last shot at survival is a $4.6 billion proposal, put forward by Chairman Eddie Lampert.
    The bid, largely composed of outside capital, has faced challenges from the start.
    The 125-year-old company has more than 68,000 employees.

Lauren Hirsch   
Published 2 Hours Ago Updated 1 Hour Ago CNBC.com
      
Sears could face liquidation within 24 hours
Sears could face liquidation within 24 hours 
1 Hour Ago | 00:43

Sears, the 125-year-old icon, has 24 hours to survive.

The employer of more than 68,000 filed for bankruptcy in October. Its last shot at survival is a $4.6 billion proposal put forward by its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments. ESL is the only party offering to buy Sears as a whole, people familiar with the situation tell CNBC. Without that bid or another like it, liquidators will break the company up into pieces.

But as Lampert stares down a deadline of Dec. 28 to submit his offer, he is quickly running out of time. As of Thursday afternoon, Lampert had neither submitted his bid, nor rounded up financing, the people familiar said. Should Lampert submit a bid, Sears' advisors would have until Jan. 4 to decide whether he is a "qualified bidder." Only then, could ESL take part in an auction against liquidation bids on Jan. 14.

It is possible Lampert, Sears' largest investor, secures financing in time to meet the deadline, these people said. The hedge fund manager turned retailer has managed last-minute feats before. Due to requirements by the Securities and Exchange Commission, Lampert will be required to make his bid public. That stipulation that could sway him to prolong the filing until its exact deadline of 4:00 p.m. ET Friday.

Nonetheless, the quickly approaching cutoff puts Sears the closest to death it has ever been. Should Lampert miss the deadline, it would put Sears and Kmart on the path to liquidation. That process would take weeks, according to the guidelines laid out by the bankruptcy court. But the process has also already slowly begun, with the retailer weighing the closure of 50 to 80 more stores, CNBC has reported.

The people familiar with these developments requested anonymity because the talks are confidential.
Sears is fighting for its life
Sears was the Amazon of the 1930s. Here's where the retailer is today 
10:24 AM ET Mon, 15 Oct 2018 | 03:17

Sears filed for bankruptcy on Oct. 15 with a little under 700 stores. At that time, it said it would close 142 unprofitable stores. In November it announced the closure of 40 additional stores.

Sears in bankruptcy has, therefore, continued a trend that far preceded its chapter 11 filing, a slow-paced liquidation.

Once the nation's biggest retailer, it was also its first "everything store," stocking everything from jewelry to clothing, from hardware to prefabricated homes. But the department store industry has struggled over the past half-decade, as the mall has become less convenient and apparel more casual. Rival J.C. Penney is also feeling the pressure of this trend, on Wednesday its shares dipped below a $1 for the first time.

Lampert had a plan to save Sears by combining it with Kmart, which ESL bought out of bankruptcy after the discount store's 2002 bankruptcy filing. But the cultures of Sears and Kmart employees were different, as were its shoppers — cross-selling Sears' appliances and Kmart's apparel proved less successful than originally planned.

In his five-year reign as CEO and even longer term as chairman, Lampert has largely run the company like the hedge-fund manager he once was, say former executives, employees and people familiar with his thinking. That meant investing less in its stores and advertising, believing such investments were optional.

It also meant keeping Sears alive through complex investments from ESL. Lampert poured millions of dollars through ESL into Sears, which struggled for years with losses and debt. Those investments came amid Lampert's strong belief in his ability to turn Sears around, in part through its loyalty program, "Shop Your Way," say people familiar with Lampert's thinking. But Sears finally hit a cliff, when it had a $134 million payment it could not meet.
Financing an issue

Keeping Sears afloat was easier for Lampert before it filed for bankruptcy. ESL's loans, while ample, had been largely protected by Sears' assets, like its prime real estate. Once it filed for bankruptcy, Sears has had far less to offer its lenders and Lampert has had less control.

ESL was in talks to help finance a junior portion of Sears' bankruptcy loan. Those talks fell apart after he asked lenders to improve the terms of the loan and offer him more protections.

His $4.6 billion offer to buy Sears, meantime, is comprised of various tranches of financing, and little of his own cash. The outside lenders he is asking to support his bid lack the same apparent drive that Lampert had to turning Sears around.
Sears was toast a day after Kmart merger closed, says former Sears Canada CEO
Sears was toast a day after Kmart merger closed, says former Sears Canada CEO 
12:23 PM ET Mon, 15 Oct 2018 | 04:38

The asset-based loan he is seeking has faced scrutiny from investment banks, weary of lending to a business that hasn't turned a profit since 2010.

Some creditors he asked to support his offer have called his efforts to keep Sears alive a "foolhardy gamble with other people's money," according to court filings. They have also taken aim at his efforts to fund $1.8 billion of his bid by forgiving Sears debt owed to him, through a so-called credit bid.

Those creditors last week said they believe there may be claims against Sears for transactions under Lampert's leadership. Those deals include Sears' spinoff of Lands' End and transactions with Seritage Growth Properties, a real estate investment trust Lampert created through select Sears' properties. As such, they have said they will object to the credit bid.

Lampert could use his own cash to backstop the $1.8 billion credit bid, but it remains unclear whether he is willing to do so.

Meantime, Lampert has also asked as part of ESL's bid that Sears' creditors agree to a release from potential lawsuits over his past transactions. With the threat of litigation looming large, that ask is far from trivial.

Without financing in place, ESL missed its chance earlier this month to be named a so-called stalking horse bidder in an auction for Sears. The miss was an early sign of the challenges Lampert faced. Being named the stalking horse in a bankruptcy sale typically affords a number of perks, like a role in setting bidding procedures and a break-up fee should that bid be topped.

See also: Timeline: The rise and fall of Sears
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Sears, Mattress Firm lead retail bankrupt 2018 list
« Reply #223 on: January 01, 2019, 12:54:55 AM »
https://www.foxbusiness.com/retail/these-are-all-retailers-that-went-bankrupt-in-2018

Sears, Mattress Firm lead retail bankrupt 2018 list

Published December 31, 2018Retail ApocalypseFOXBusiness


Sears Chairman Eddie Lampert looks to save his company with $4.6 billion bid

Retail expert Burt Flickinger discusses how Sears Chairman Eddie Lampert is trying to buy the company out of bankruptcy.

There is no doubt that 2017 was a tough year for many retailers, with industry icons such as Toys R Us, RadioShack, Gymboree and Payless shoes all filing for bankruptcy— but 2018 wasn’t much better.

Despite record holiday sales, relatively high consumer sentiment throughout the year, a strong economy and low unemployment, more than a dozen retailers had to file for bankruptcy this year.

While retailers such as Sears, Mattress Firm, David’s Bridal and Brookstone made the biggest news when announcing their liquidation, other smaller chains like Claire’s, Nine West and Bon-Ton also helped contribute to the downward spiral of some shopping malls.

Here are all the retailers that filed for bankruptcy in 2018.

David’s Bridal

In November, wedding dress retailer David’s Bridal filed for bankruptcy. The bankruptcy was part of a deal the retailer reached with its lenders to reduce its debt by more than $400 million. The chain said it would keep all of its stores open during its restructuring process.

Mattress Firm

In October, the country’s largest mattress retailer filed for Chapter 11 bankruptcy protection. Additionally, it announced it will close up to 700 of its 3,400 locations across the country. Overall, it has been a rocky few years for the Houston-based mattress chain with various lawsuits and “accounting irregularities.”

Sears

In October, Sears announced it filed for Chapter 11 bankruptcy protection after years of struggling with slowing sales and store closures. That same month, its CEO Eddie Lambert stepped down from his role but was named chairman of the company. Lambert has also been trying to keep the iconic retailer through his hedge fund, ESL Investments. Last week, ESL reportedly submitted a $4.4 billion bid to try to save Sears from liquidation. That bid, however, is still pending.

Brookstone

In August, Brookstone announced it filed for Chapter 11 bankruptcy protection. The retailer also said it plans to shutter more than 100 locations as a result.

Nine West

In April, shoe retailer Nine West announced it filed for bankruptcy and plans to shutter all 70 of its brick-and-mortar locations across the U.S.

Claire’s

In March, accessories chain Claire’s announced it has filed for Chapter 11 bankruptcy in order to trim some of its debt.

Bon-Ton

In February, department store Bon-Ton announced it filed for bankruptcy protection. After a bid to buy the retailer fell through, Bon-Ton announced it will have to close more than 200 locations across the country.

Other small retailers that filed for bankruptcy in 2018 include:

A’gaci - Filed in January

Kiko USA - Filed in January

The Walking Company - Filed in March

Rockport - Filed in May

Gump’s - Filed in August

National Stores - Filed in August
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 37279
    • View Profile
🏬 Sears picks liquidator should rescue talks fall through
« Reply #224 on: January 07, 2019, 12:38:10 AM »
https://www.reuters.com/article/us-sears-bankruptcy-liquidation/sears-picks-liquidator-should-rescue-talks-fall-through-sources-idUSKCN1P103R

Business News
January 6, 2019 / 5:20 PM / Updated 6 hours ago
Sears picks liquidator should rescue talks fall through: sources
Jessica DiNapoli, Mike Spector


FILE PHOTO: The Sears, Roebuck and Company logo is seen outside a store in Brooklyn, New York, U.S., October 10, 2018. REUTERS/Shannon Stapleton/File Photo

(Reuters) - A long-standing liquidator is now first in line for one of the U.S. retail sector’s most daunting assignments: shutting down 126-year-old department store chain Sears Holdings Corp (SHLDQ.PK), people familiar with the matter said on Sunday.

Sears has lined up Closter, New Jersey-based Abacus Advisory Group LLC to sell the chain’s vast inventories of tools, appliances and store fixtures should negotiations with Chairman Edward Lampert over his $4.4 billion takeover bid end unsuccessfully, the sources said.

Lampert’s bid to rescue Sears through an affiliate of his hedge fund, ESL Investments Inc, has fallen short so far, the sources said. The billionaire and Sears are racing to resolve the bid’s sticking points before a Tuesday court date after negotiations dragged well beyond a Friday deadline, the sources said.

The bid would preserve 425 Sears stores and up to 50,000 jobs across the United States, according to a letter delivered to Sears on Dec. 28. A liquidation would put roughly 68,000 people Sears now employs out of work.

Besides tapping Abacus, Sears has turned to a firm run by retail magnate Jay Schottenstein to help it shed inventory in the event of a liquidation, the sources said. Schottenstein is the chief executive of teen apparel chain American Eagle Outfitters Inc (AEO.N) and chairman of shoe seller DSW Inc (DSW.N).

The sources asked not to be identified because the matter is confidential. Sears and Alan Cohen, chairman of Abacus, declined to comment. Schottenstein could not be immediately reached for comment.

Abacus has a 16-year history with Sears, after liquidating more than 800 stores for the once-mighty chain since 2002, according to bankruptcy court papers. Sears had already retained Abacus as a liquidation consultant after filing for bankruptcy, but decided to take offers from other liquidators.

Sears decided to continue working with Abacus last Friday after turning down bids from competitors that have worked on some of the biggest wind-downs in recent years, including Bon-Ton Stores Inc, Toys “R” Us Inc and Sears Canada, the sources said.

Abacus has worked on several liquidations, including Filene’s Basement and Service Merchandise Corp, according to its website.
ADMINISTRATIVE CLAIMS

A main point of contention in the negotiations between Lampert and Sears on Sunday centered on whether Lampert’s bid adequately addressed so-called administrative claims, the legal term of art for the bankruptcy costs Sears has racked up since filing for bankruptcy protection on Oct. 15, some of the sources said.

Those costs, which include bills from lawyers and financial advisers, are expected to exceed $200 million, those sources said.

Under one scenario being discussed, Lampert would agree to cover the shortfall if Sears cannot fully pay those bills, these sources said.

Lampert’s bid also proposes forgiving $1.3 billion of debt he holds in exchange for ownership of the reconstituted Sears, a bankruptcy maneuver known as a credit bid. In addition, Lampert wants a release from legal exposure related to a series of transactions he engaged in with the retailer before it filed for bankruptcy protection. Those made him the company’s biggest creditor, in addition to its largest shareholder.

Lampert’s offer did not include putting up cash to back the credit bid. That has raised concerns in the negotiations since there remains a chance that the maneuver might not be allowed in court given ongoing investigations of Lampert’s pre-bankruptcy deals, which the hedge fund manager maintains were proper, the sources said.

Lampert’s takeover bid is not likely to go forward absent settling the concerns related to the proposed credit bid and legal release, one of the sources said.

Unsecured creditors have pushed for Sears to liquidate, partially because they contend they will realize a better financial recovery if it does. Those creditors, which include Sears landlords and bondholders, have also questioned Lampert’s pre-bankruptcy transactions with the retailer.

Reporting by Jessica DiNapoli and Mike Spector in New York; Editing by Peter Cooney
Our Standards:The Thomson Reuters Trust Principles.
Save As Many As You Can

 

Related Topics

  Subject / Started by Replies Last post
30 Replies
4448 Views
Last post March 02, 2019, 10:52:03 AM
by Surly1
0 Replies
397 Views
Last post January 16, 2016, 02:55:02 AM
by azozeo
1 Replies
410 Views
Last post May 15, 2018, 04:01:16 PM
by Palloy2