One of the largest department stores at Greenwood Park Mall — a mainstay since the mall opened its doors in 1965 — will close in the midst of this year’s holiday shopping season.
Sears, which once dominated the American retail landscape, filed for Chapter 11 bankruptcy protection on Monday, buckling under its massive debt load and staggering losses.
Sears Holdings, which operates both Sears and Kmart stores, will close 142 unprofitable stores by the end of the year, with liquidation sales expected to begin shortly. That’s in addition to the closure of 46 unprofitable stores that had already been announced.
In addition to the Greenwood store, Sears Holdings has a Sears Hometown Store in Greenfield and a Sears Appliance Outlet in Speedway. It also operates one Kmart store in Indianapolis, 6780 W. Washington St., and one in Elwood.
The company closed its 46-year-old department store in Castleton Square this summer.
L.S. Ayers was the last major Greenwood Park Mall department store to close, which happened more than a decade ago.
L.S. Ayers, which for decades occupied the entire northwest corner of the mall, was torn down in 2006 and replaced with several smaller stores and restaurants including Barnes & Noble, the Cheesecake Factory, Bar Louie and BJ’s Restaurant and Brewery, as well as a kids play area.
Sears, which started as a mail order catalog in the 1880s, has been on a slow march toward extinction as it lagged far behind its peers and incurred massive losses over the years.
“This is a company that in the 1950s stood like a colossus over the American retail landscape,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy. “Hopefully, a smaller new Sears will be healthier.”
The company has struggled with outdated stores and complaints about customer service. That’s in contrast with chains like Walmart, Target, Best Buy and Macy’s, which have been enjoying stronger sales as they benefit from a robust economy and efforts to make the shopping experience more inviting by investing heavily in remodeling and de-cluttering their stores.
Sears joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate. Some, like Payless ShoeSource, successfully emerged from reorganization in bankruptcy court. But plenty of others like, Toys R Us and Bon-Ton Stores Inc., haven’t. Both retailers were forced to shutter their operations this year soon after Chapter 11 filings.
Given its sheer size, Sears’ bankruptcy filing will have wide ripple effects on everything from already ailing landlords to its tens of thousands of workers.
Lampert, the largest shareholder, has been loaning out his own money for years and has put together deals to prop up the company, which in turn has benefited his own ESL hedge fund.
Last year, Sears sold its famous Craftsman brand to Stanley Black & Decker Inc., following earlier moves to spin off pieces of its Sears Hometown and Outlet division and Lands’ End.
Edward S. Lampert has stepped down as CEO but will remain chairman of the board. A new Office of the CEO will be responsible for managing day-to-day operations.
In recent weeks, Lampert has been pushing for a debt restructuring and offering to buy some of Sears’ key assets, like Kenmore, through his hedge fund as a $134 million debt repayment came due on Monday. Lampert personally owns 31 percent of the company’s shares, while his hedge fund has an 18.5 percent stake, according to FactSet.
“It is all well and good to undertake financial engineering, but the company is in the business of retailing and without a clear retail plan, the firm simply has no reason to exist,” said Neil Saunders, managing director of GlobalData Retail, in a recent analyst note.
Sears’ stock has fallen from about $6 over the past year to below the minimum $1 level that Nasdaq stocks are required to trade in order to remain on the stock index. In April 2007, shares were trading at around $141. The company, which once had 350,000 workers, has seen its workforce shrink to fewer than 90,000 people as of earlier this year.
As of May, it had fewer than 900 stores, down from a 2012 peak of 4,000.
In a March 2017 government filing, Sears said there was “substantial doubt” it would be able to keep its doors open — but insisted its turnaround efforts would mitigate that risk.
Lampert pledged to return Sears to greatness by leveraging its best-known brands and its vast holdings of land, and more recently planned to entice customers with a loyalty program. But losses continued and the company struggled to get more people through the doors or to shop online.
The Associated Press and Indianapolis Business Journal contributed to this report.
This story will be updated.
