|Amarillo's Sears location located at Westgate Mall|
The retailer, which sought chapter 11 protection in U.S. Bankruptcy Court in White Plains, N.Y., reached a deal with its lenders that will allow the 125-year-old company to keep hundreds of its stores open for now.
The company said its controlling shareholder, Edward Lampert, has stepped down as CEO, but will remain chairman. The hedge-fund manager, who took control when he merged Kmart with Sears in 2005, ran the company as it racked up losses and closed hundreds of stores in recent years.
Sears said it would close 142 money-losing stores near the end of the year, with liquidation sales expected to begin shortly. The closings are in addition to 46 stores that are expected to close by next month. Currently, the company operates roughly 700 Sears and Kmart stores. It employs about 70,000 people.
The bankruptcy filing came before Sears was required to repay $134 million in loans later on Monday. Sears has lined up $1.875 billion in bankruptcy financing to pay off its existing loans and fund its stores pending the chapter 11 case, or about $300 million more than what the company had before the filing.
Lampert’s hedge fund, ESL Investments Inc., is in talks to provide another $300 million junior bankruptcy loan that would provide additional cash for the retailer’s business. ESL is also exploring a stalking-horse bid to buy “a large portion” of the company’s stores in the bankruptcy process.