In a proposal disclosed yesterday in a filing with the U.S. Securities and Exchange Commission, Lampert’s hedge fund, ESL Investments Inc., urged Sears Holdings Corp. to restructure its liabilities as well as sell about $1.5 billion in real estate and $1.75 billion in other assets, including the company’s Home Services division and household appliance brand Kenmore. The move would reduce the department store chain’s debt by nearly 80 percent to approximately $1.2 billion.
Lampert first offered to purchase the company’s real estate through his hedge fund in April in a bid to salvage the retail enterprise. Now, as Sears faces “significant near-term liquidity constraints” — counting a $134 million debt payment due on Oct. 15 — the latest proposal signals a growing sense of urgency.
“Sears must act immediately to have sufficient runway to continue its transformation,” read the filing. “Given the current situation, we believe that substantial progress must be made … without delay. We are ready and willing to move as quickly as possible to help the company transform into a business that is better positioned to thrive in the 21st century.”
According to the proposal, Sears has made headway through closing unprofitable stores, selling properties, seeking partners to expand the reach of brands like Kenmore and reducing operating expenses. However, its transformation has been stalled due to several factors, including a sharp decline in brick-and-mortar foot traffic and growing online competition.
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