Sears filed for Chapter 11 bankruptcy protection in White Plains, New York earlier on Monday with a plan to close about 142 of its 700 stores by year-end and sell its best-performing stores in an auction in January to a buyer that will keep them operational.
Liquidation sales will start immediately at closing stores, the company said.
In March, Toys R Us announced it was shuttering all of its United States stores while other big names such as Macy's and JC Penney have also been forced to close numerous locations and lay off workers.
The filing, made in U.S. Bankruptcy Court for the Southern District of NY, lists total assets as $6.937 billion and total debts as $11.339 billion as of August 4.
"Today is a day that will live in retail infamy", Neil Saunders, managing director at GlobalData Retail, said in a statement.
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The number of stores peaked in 2012 at 4,000, including its Sears Canada division that was later spun off. After past disruptions to its distribution network, Whirlpool has been able to offset potential declines through increased sales elsewhere, the company said.
The struggling retailer has been losing market share for years, but its Kmart and Sears chains still generate about $14 billion in annual sales. At the same time, Lampert's ESL Investments Inc.is negotiating a financing deal while also discussing buying "a large portion of the company's store base", Sears said in a statement.
The 125-year-old company, which has not turned a profit since 2010, had a $134 million debt payment due Monday that it previously reported it can not cover.
"We anticipated these changes and reorganized in light of them, but have yet to achieve the results that we desire".
But by 1994, Sears was selling off its consumer finance businesses, even Allstate.
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Sears is planning to seek bankruptcy protection in NY as soon as Sunday night, though a court filing could slip into Monday, the sources added, asking not to be identified because the negotiations are confidential. Options could range from food halls to pop-up stores to Tonya-Harding-esq skating rinks, Rosenblum said - so long as the concept was about more than just shopping. The latest blow for Sears came Monday, when a $134 million debt payment it could not afford came due.
Eddie Lampert, a hedge-fund manager who took over as Sears chief executive officer in 2013, stepped down as CEO, it was also announced on Monday.
Whirlpool, which had started in business more than a century ago selling its appliances at Sears, pulled its various brands out of Sears and Kmart stores past year.
For decades, Sears was king of the American shopping landscape. Total revenue dropped 30 percent in the most recent quarter, hurt by continued store closings.
1886 - Richard Sears starts the R.W. Sears Watch Co.in Minneapolis. The future of the stores could hinge on Sears' negotiations with landlords over their leases.
Sears files for Chapter 11 bankruptcy
The company has said it's the nation's largest provider of home services, with more than 11 million service calls a year. The Sears catalog eventually sold products ranging from hardware and automobiles to kits for building an entire house.
In July, Sears closed its last store in Chicago, once its hometown.