Lampert and other defendants "knew this but nonetheless continued to pursue further asset transfers for their own enrichment" as the company posted massive losses and rosy projections in budget plans, the complaint alleges. At the time an initial lawsuit was filed , ESL said in a statement that it "vigorously disputes the claims" against it and Lampert, which the firm said "repeats baseless allegations and fanciful claims. While Sears Holdings spun off assets, it also went through wave after wave of store closures as its retail business weakened and sales fell.
And the shrinking and asset sales continue today under Transformco. In January, for example, the company sold off five Kmart leases to Target. Since it was formed, Transformco has been a private company, meaning the window into Sears' finances and even basic operations has all but closed.
Rice said that the company doesn't provide financial information to vendors, which many private companies do under nondisclosure agreements so they can receive trade credit. Even given the little that is known, it is difficult to find any outsider who thinks Sears and Kmart stores will survive in the long run. The whole company is a husk of what it once was.
There is no intention there of [operating] as a legitimate retailer. It's a financial play. There's probably some things to do with property, but as a viable retail business, there's no future there. The waves of store closures since the bankruptcy also raise a question: Why did Lampert bother buying the stores? Did he really believe there was a future for the retailer? Nobody can know the answer to that except Lampert. Transformco owns other assets along with the Kmart and Sears full-line stores.
In mid, the company acquired Sears Hometown , which Sears Holdings had spun off in At the time of the deal, about two years ago, the new Sears acquired Hometown stores and appliance Outlet stores. While listed on Transformco's website, Sears Outlet was actually acquired in by the parent of Liberty Tax services, today known as Franchise Group.
Transformco also appears to own the storied Kenmore appliance brand as well as the Sears Home Services home improvement business. The latter also has a tortured history with Lampert and ESL at the center. While in bankruptcy, Sears Holdings, still under Lampert, had a bid from Service. According to the bidder, Lampert's ESL, which had also tried to buy the services business in the past, derailed multiple attempts by Service.
Finally, a stalking horse bid by Service. After Lampert created Transformco and bought Sears' remaining stores, he cut a deal to buy the home services business as well. They eventually settled and split the money , with the lion's share going to Sears. Since acquiring the services unit, Transformco has reportedly explored selling it. So far, it remains with the new Sears company. It's just one more chapter in the legal saga over Sears. As for the Kenmore appliance brand, it has likely lost much of its former luster as a brand.
Gordon says he once asked a class of 40 students if they knew the brand name. Meanwhile, Sears Holdings is still in bankruptcy, two and a half years after filing.
Some vendors who shipped to the company in the weeks leading up to and after Sears filed for bankruptcy are still trying to get paid as administrative creditors. As a result, the old Sears is stuck in a bankruptcy "no man's land," according to Joseph Sarachek, founding principal of Sarachek Law, who is representing a handful of foreign vendors trying to get paid for shipments made to the old Sears in He will remain chairman. Lampert has a controlling ownership stake in Sears, with a 31 percent stake, according to FactSet.
ESL Investments owns about 19 percent. Further asset sales may reduce debt, but they would not put the company on a sound financial footing nor would they solve the operating losses the group is racking up. Data on Sears locations was provided by AggData. Sears and Kmart have closed more than 3, stores and cut about , jobs in the past 15 years.
After the new closings, it appears there will be 19 Sears department stores and 15 Kmart stores remaining. The majority of those stores are Hometown Stores, "primarily operated by independent dealers or franchisees of an affiliate of Transformco.
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