Sears Chairman Reportedly Submits 11th-Hour Bid As Retailer Faces Liquidation

CNBC reported Friday that Sears Chairman Eddie Lampart submitted a last-minute bid for the retailer that appears to be the company's only hope of avoiding liquidation. 

The deadline for bids was 4 p.m., according to an earlier report. CNBC's update Friday evening cited "people familiar with the situation." 

Sears Holdings Corp. SHLDQ was down 2.24 percent at 17 cents at the close. 

A Hedge Fund Proposal 

Lampert made public a tentative $4.6-billion deal to buy the company out through his hedge fund ESL Investments earlier this month. 

If he's successful, it could save Sears’ 500 remaining stores and more than 50,000 employees. As part of the proposed deal, ESL would forgive $1.8 billion in debt Hoffman, Ill.-based Sears owes the hedge fund.

A bid could help divert liquidation, but may not necessarily. Sears’ advisors have until Jan. 4 to decide whether ESL is a “qualified bidder.” Only then could ESL take part in an auction against liquidation bids on Jan. 14.

If Lampert doesn’t make a successful bid, liquidators will start breaking the company up. Sears Holdings also includes the Kmart chain, which Lampert merged with Sears in 2004. Liquidation would likely take a matter of months to complete.

If there are any other potential bidders out there, none have emerged publicly.

Decline Of An American Icon

Sears was once dominant on the American retail scene, but dwindled to a shell of its former self in recent years and filed for bankruptcy in October. It has since closed hundreds of stores in a last-ditch effort to restructure. Sears had just under 700 stores in October, and announced then it was closing 142. Last month, it announced it was shutting another 40.

In some ways, Sears was Amazon before Amazon, figuring out a way to sell to millions of Americans who couldn’t get to its stores with its famous catalogs, through which generations ordered goods that were delivered to their homes.

But the company’s brick-and-mortar stores — a mainstay first of America’s downtowns and later its vast suburban shopping malls — suffered as shoppers abandoned malls in droves in the last couple decades and headed online.

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Photo courtesy of Sears.