Crunch time for Sears: More store closings and a last-minute bid to save company

Sears continues its struggle to survive.

The iconic but now bankrupt retailer announced Friday it was closing 80 more Sears and Kmart stores. It also received a last-minute bid from its chairman to keep much of the rest of the business alive. The company’s future remains very much in doubt.

Eddie Lampert, the Sears chairman and its largest creditor, met a deadline imposed by the company for potential buyers of hundreds of stores and other Sears assets.

Lampert, who is Sears’ largest creditor, said his plan would keep 425 stores open, rather than the 500 stores he proposed earlier. He also cut the price he’s willing to pay by $200 million to $4.4 billion.

He says he still plans on offering jobs to as many as 50,000 employees. And he said he had received $1.3 billion in loan commitments from three leading financial institutions, which he did not identify.

Sears declined to comment. It is on record that it wants to keep the company open, although it has not ruled out moving to close the business. The final decision on Lampert’s bid will be made by the judge overseeing Sears.

A committee of Sears’ other leading creditors has argued that the company should shut down the business, closing all the stores and liquidating its inventory and other assets. They argue it is the best way to stem losses and return the greatest amount of cash to the people and businesses owed money by Sears. Lampert argues that keeping the chain in business is the best course for everyone, including creditors and employees.

“Our bid reflects our firm belief that there is a future for Sears as a smaller, less indebted retailer,” he said. “We continue to believe that Sears’ integrated and complementary businesses and brands can form the framework of a successful platform after emerging from bankruptcy.” Reuters and CNBC reported Lampert’s bid earlier Friday evening.

Sears filed for bankruptcy protection on October 15.

In a court filing, the creditors’ attorney called Sears’ plan to become profitable “nothing more than wishful thinking ” and “an unjustified and foolhardy gamble with other people’s money.”

US Bankruptcy Court Judge Robert Drain, who is hearing the case, has so far allowed Sears to proceed with plans to stay in business. But he will be hearing from creditors again at hearings set for next month. Any plan would have to be approved by the court.

Earlier on Friday, Sears announced it was closing 80 more stores. The closings comprise 43 Sears and 37 Kmart stores, the two brands operated by Sears Holdings. Most of the 80 stores will shut down by late March. Going out of business sales will start within two weeks.

The company had nearly 700 stores at the time of its bankruptcy filing.

Lampert bought Sears and merged it with Kmart in 2005 to form Sears Holdings. He was its CEO until its bankruptcy filing as well as its primary shareholder as it lost billions of dollars and closed thousands of stores.

For much of the 20th century it was not only the nation’s largest retailer, it was the largest private-sector employer. With its network of hundreds of stores anchoring malls across America, as well as its catalog selling people virtually any item they could need, it was both the Walmart and Amazon of its day.