15 October 2018 by lberuti
More than a century ago, SRAC (Sears, Roebuck and Co.) pioneered the strategy of selling everything to everyone. It all came to an abrupt end today, as the company filed for bankruptcy ahead of a $134mln payment that was coming due. It is using a chapter 11 filing in Federal Bankruptcy Court in New York to cut its debt load and keep operating at least through the holidays. The company eventually succumbed to the competition of online retailers. It has roughly $5.6Bln in outstanding debt and has dwindled down to about 820 Sears and Kmart stores, from 2000 five years ago. The company was taken over by Eddie Lampert a few years ago, and he had often attempted to keep SRAC viable with loans and audacious financial engineering. He spun numerous assets off from the retailer into separate companies that his hedge fund - ESL Investments – invests in. But while many of these spin offs flourished, SRAC slid toward insolvency. It will be the first default among the constituents of the 3 most recent series of CDX HY.