Next deadline for the fate of Sears in Concord is coming fast

  • The Concord Sears will remain open after the company announced it would be closing 142 of its stores as part of a restructuring effort. Caitlin Andrews

Monitor staff
Published: 10/20/2018 11:07:20 PM

Concord’s Sears store may have dodged the bankruptcy bullet so far but its fans can breathe easy for only a couple of weeks, because a new deadline is approaching for what courts call “store rationalization.”

The Sears in the Steeplegate Mall is among the 211 stores whose fate will be announced no later than Nov. 15, according to a Store Footprint Plan filed with the U.S. Bankruptcy Court by Sears Holdings Corp.

“The documents filed with the court show that 333 stores are profitable. This includes Kmarts in both Salem, NH and West Lebanon, NH. …. Their fate will be decided in 2019,” wrote Alex Koutroubas of the Dennehy and Bouley lobbying firm in emails to the Monitor. “There are 211 (including Concord Sears) marginal stores, meaning they might be slightly profitable, break-even or are very close to break-even.”

By Nov. 1, Sears must file a notice with the court giving its plans for those 211 stores – whether it wants to close them, as it has said it will do to 142 stores, including Sears in Portsmouth and in Newington, in its Initial Store Rationalization plan, or keep operating them in some form. The bankruptcy court will have until Nov. 15 to agree or disagree with this Secondary Store Rationalization plan.

“We don’t have any insight into exactly why Sears is delaying this decision. I would say that there is still hope, but I might not put too much money on a bet that the store will remain open,” wrote Jennifer Doran, a partner at Hinckley Allen law firm in Boston, with expertise in bankruptcy.

“There may be a few reasons for the delayed decision on the Concord store. One might be a study of the impact that closing other stores in the region might have on sales at the Concord store. Another might be that Sears is determining how best to allocate its funding to determine how many stores it can support going forward. A less optimistic reason might be that Sears is looking for a buyer for that location,” she wrote.

Depending on whether Sears owns or leases its space in Steeplegate Mall, it could sell the property outright or just sell the lease rights. Doran wrote that “a debtor can generate significant value by auctioning off the right to take over a lease,” which happened for a number of Toys R Us leases when that company went under this year. “In some cases the prospective tenants paid hundreds of thousands or even millions for the right to assume a lease,” she wrote.

Sears has been one of the anchor stores at Steeplegate Mall since the mall opened in 1990.

The once-dominant Sears has suffered from weak sales and weak investment in its stores for many years, both as a result of changes in retail and in a series of corporate decisions.

The company said Monday it has obtained $300 million in financing from banks to keep the operations going through bankruptcy. It is also negotiating a $300 million loan from Edward S. Lampert, the company’s largest shareholder.

The filing listed between $1 billion and $10 billion in assets while liabilities range between $10 billion to $50 billion.

(David Brooks can be reached at 369-3313, or on Twitter @GraniteGeek.)

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