Sears is running out of cash, and its CEO is scrambling to keep the company afloat.
In a proposal made public on Monday, Sears CEO Eddie Lampert and his hedge fund, ESL Investments, laid out a plan to give the company a short-term cash infusion and extend deadlines for debt repayments.
Specifically, he wants creditors to restructure about $1.1 billion of debt coming due in the next two years. He has also asked Sears' board to sell $1.5 billion worth of real estate and divest $1.75 billion of assets.
"Sears now faces significant near‐term liquidity constraints," a filing on the proposal says.
Wall Street analysts have long predicted a Sears bankruptcy. The retailer has managed to stay afloat with loans from Lampert, the sale of valuable real estate, and the slow dismantling of its exclusivity over some big American brands.
But Sears' options are now running out as the company's sales continue to plummet amid mass store closings.
The company has cut its store count in half over the past five years, down to 894 stores on May 5 from 1,980 stores in 2013.
Sears has also been systematically trimming its corporate workforce. The company has cut roughly 420 corporate jobs this year, following two rounds of cuts last year totaling more than 500 jobs.
Sears disclosed last year that its corporate headcount at Hoffman Estates, Illinois, and a nearby satellite office had fallen to fewer than 4,250 workers from 5,444 employees in 2015.
Lampert's proposal is meant to give Sears more time to turn business around and return to profitability, Kunal S. Kamlani, the president of ESL Investments, said in a statement.
"We would welcome broad participation from investors and encourage the Sears Board and other interested parties to work with us as quickly as possible to advance the transactions we have proposed or offer reasonable alternatives," he said.
