Eddie Lampert bankrolling Sears as it struggles to recover from bankruptcy woes
Troubled retailer Sears has borrowed about $150 million from lenders, including its billionaire owner Eddie Lampert, as it struggles to become profitable just one year after it filed for bankruptcy protection, according to Reuters.
Reuters reported the new financing will go toward stocking Sears’ store shelves ahead of the crucial holiday shopping season. It’s not the first time that Lampert has thrown a financial lifeline to the chain retailer: Over the last decade, he extended various loans to Sears through his hedge fund ESL Investments Inc.
Sears did not immediately respond to a FOX Business request for comment.
After several years of declining sales, Sears — once the nation’s largest retailer — filed for Chapter 11 bankruptcy in October last year after facing increased competition from online retailers like Amazon. Lampert, who became CEO of the retailer in 2005 after his hedge fund purchased it, stepped in and purchased Sears in a $5.2 billion deal last February, saving 425 stores and promising to return the company to its glory days.
In this Nov. 17, 2004, file photo, Kmart Chairman Edward Lampert listens during a news conference in New York. (Gregory Bull/AP, File)
However, about a quarter of the Sears and Kmart stores Lampert bought out of bankruptcy have since closed, or are closing, according to a Wall Street Journal report. The company is expected to have about 300 stores at the end of the year, according to Reuters.
Lampert was named in an April lawsuit, alongside other board members, filed by the bankrupt estate of Sears Holding Corps for allegedly stripping the retailer of more than $2 billion in assets, ultimately contributing to the company’s demise.
During his tenure, Lampert closed more than 3,500 stores and fired more than 250,000 workers, while also imposing cost-cutting initiatives that led to sales declines and additional store closures.