Is There Any Life Left In Sears? Department Store Struggles Continue

Sears may be the next retailer to fall to the wayside as shopping malls fall out of fashion with consumers amid the coronavirus pandemic.

Sears and Kmart filed for bankruptcy in October 2018 and were able to stave off another bankruptcy filing during the pandemic as sales lagged and foot traffic waned. But now the retailer is facing a new series of financial troubles.

The company sold off its DieHard battery brand for $200 million to Advance Auto Parts in 2019 and its Craftsman tool brand in 2017 to Stanley Black & Decker. It also let go of its product delivery and installation business, Innovel Solutions, to Costco for $1 billion in March and has been looking to sell off its Kenmore appliance brand the last few years.

Despite these sales, Sears and Kmart stores are on "life support" and are "slowly, quietly dying," reports CNN. Little transformation is occurring at locations, with most stores seeing closures over the last few years. A large portion of the company’s remaining 74 Sears and 48 Kmart stores are being set up for sale, but in a nonexistent commercial real estate market, are having trouble finding buyers.

Virtually all Sears and Kmart locations are being listed with commercial real estate brokers or closed where possible, and until the commercial real estate market improves, the company is facing pressure to close more locations.

"Sears is biding its time until the market is more conducive," predicted Neil Saunders, managing director and retail analyst at research firm GlobalData, to CNN.

Bankruptcy to remain solvent is also not an option as the company only emerged from its Chapter 11 filing in early 2019 after former Sears chairman Eddie Lampert’s hedge fund, ESL Investments, purchased the retailer in a $5.2 billion deal.

Most likely financial institutions and vendors would be unwilling to extend credit to Sears and Kmart to help shed debt or liabilities, Reshmi Basu, an expert in retail bankruptcies at Debtwire told CNN. "This has been a slow motion liquidation," she explained.

The retailer had about 400 stores when it emerged from bankruptcy in February 2019. Most recently, in February, the company announced that it was closing 51 Sears and 45 Kmart locations, USA Today reported.