U.S. retailer Sears filed for bankruptcy protection on Monday with a plan to close 142 more stores countrywide towards the end of the year, casting doubt on the future of retail chains amid their fierce competition with online shopping platforms.
The 125-year-old retailer, once the nation's largest, said liquidation sales at these stores are expected to begin shortly. This is in addition to the previously announced closure of 46 unprofitable stores that is expected to be completed by November 2018.
Edward S. Lampert, Chairman of Sears Holdings, said in a statement that the company has tried hard to transform the business and unlock the value of our assets, but the plan has yet to deliver the results we have desired.
The company filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.
The Chapter 11 process will give Sears the flexibility to strengthen its balance sheet, enabling the company to accelerate its strategic transformation, continue right sizing its operating model, and return to profitability.
"Our goal is to achieve a comprehensive restructuring as efficiently as possible, working closely with our creditors and other debtholders, and be better positioned to execute on our strategy and key priorities," said Lampert.
The last time the retailer made a profit was in 2010.
Shares of Sears plunged 23.07 percent to trade at 0.31 U.S. dollars apiece, registering a 52-week low.
Meanwhile, the company said Lampert has stepped down from his role as chief executive officer of the company, effective immediately. However, he will remain chairman of the board.
In addition the company has pointed Mohsin Y. Meghji, managing partner of M-III Partners, the chief restructuring officer.
Sears are among some of the big retailers names in the United States that closed stores this year after years of unsatisfying sales, layoffs and digital disruption.
Both Toys "R" Us and Bon-ton filed for bankruptcy earlier this year. Macy's, JCPenney, and Lord & Taylor, among others, have announced list of locations to be shuttered.
