Dive Brief:
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The U.S. bankruptcy court of Southern District of New York on Wednesday canceled an auction of Sears' home improvement business after it did not receive any other qualifying bids. The business is expected to go to the stalking horse bidder, Service.com. The marketplace for contract and home improvement work made a $60 million bid in early November. Another meeting in the company's bankruptcy process, in which an executive bonus plan will be considered, is scheduled for today.
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Sears vendors, who are still owed millions of dollars, are getting nervous they won't be repaid in full. According to a Bloomberg analysis of court documents, vendors have collectively sold over $24 million of legal claims against Sears to hedge funds like Whitebox Advisors and Cherokee Debt Acquisition.
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Sears on Friday reported its first quarterly same-store sales rise in years thanks to liquidation sales; Comps at Sears rose 3.2% and 6.1% at Kmart, according to an SEC filing. Total revenue dropped by $833 million year-over-year to $2.7 billion.
Dive Insight:
As Sears moves its way through bankruptcy court, the future of the business — if there is to be one — is in question. Over the last several months, Sears has announced it will close at least 182 stores through bankruptcy, though it has also identified about 500 stores it hopes to sell to a new owner to continue to operate the business. Sears Holdings Chairman Eddie Lampert hopes that person will be him.
Through his hedge fund ESL Investments, Lampert earlier this month made a $4.6 billion bid for Sears, its real estate and brands like Kenmore and its Sears Auto Services. About a week later, though, Sears Holdings announced its hire of real estate firm Jones Lang LaSalle, which is shopping around its stores to retailers, mall owners and others. The stores have attracted "high interest in major markets" from retailers like Burlington Stores, At Home Group, Dick’s Sporting Goods and U-Haul, people familiar with the matter told Bloomberg.
Amid ongoing bankruptcy proceedings this week Sears also launched a new feature to its Shop Your Way loyalty program, Credit Confidence Powered by LendingTree, according to a company press release. The feature lets users of the mobile app check their credit score, apply for loans and check their financial health. While Sears' ultimate fate within the retail landscape may be in limbo, news of the new feature added to its loyalty program suggests it's still business as usual for now.
