Sears closing Santa Rosa store as part of Chapter 11 bankruptcy
Renee Rucker of Santa Rosa walked out of the Sears store Monday afternoon at the Santa Rosa Plaza empty-handed.
Rucker, a longtime Sears shopper who recalls visiting the local department store when it first opened in the spring of 1980, now wanted to buy a Kenmore oven. But to do so, she said, she’d have to pick it up, install it at home and get rid of her old oven on her own.
“I don’t have the means to do that,” said Rucker, standing outside the Sears entrance on B Street with her 15-year-old daughter Kaitlyn. “They just lost a sale.”
Rucker, who had heard earlier in the day the retailer had filed for Chapter 11 bankruptcy protection from its creditors, said she was sorry to hear the news. The Santa Rosa store is one of two unprofitable Bay Area Sears stores that have been slated for closure as a result of the company’s ongoing restructuring.
Sears Holdings, which owns both Sears and Kmart discount stores, said it would close 142 of its worst-performing stores, including 10 Sears and 7 Kmart stores in California. The 142 stores represent about 20 percent of the company’s remaining department stores. The latest closings are in addition to the 46 U.S. stores the retailer said in August it was going to shutter.
Sears said in a bankruptcy court filing it would begin liquidation sales within two weeks. A Sears spokesman said the Santa Rosa store is likely to close near the end of the year.
Sears long ago gave up its mantle as a retail innovator, overtaken first by big-box retailers like Walmart and Home Depot and then, by Amazon online as the go-to shopping destinations for clothing, tools and appliances.
In the last decade, Sears had been run by a hedge fund manager, Edward S. Lampert, who sold off many of the company’s valuable properties and brands, but failed to develop a winning strategy to entice consumers who increasingly shop online.
The result has been a long, painful decline. A decade ago, the company employed 302,000. Today, there are about 68,000 people still working at Sears and Kmart, which Lampert also runs.
Now, the retailer aims to use the reorganizational bankruptcy filing to cut its debts and keep operating at least through the holidays, according to two people briefed on the matter who spoke on condition of anonymity to discuss the company’s plans.
As part of the reorganization plan, Sears will receive a loan of more than $500 million to help keep its shelves stocked and employees paid, these people said.
“It’s a sad day for American retail,” said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. “There are generations of people who grew up on Sears and now it’s not relevant. When you are in the retail business, it’s all about newness. But Sears stopped innovating.”
The Sears store in Santa Rosa, once the go-to shop for back-to-school clothes, now takes a back seat to merchants like American Eagle, Forever 21 and PacSun. That’s where Rucker’s teenage daughter Kaitlyn prefers to shop for her clothes.
Rucker said she recently bought a chainsaw and weed wacker at the local Sears store. “This place was really good for my tools and my appliances,” she said.
On Monday, Theresa La-Rose, 23, and her husband, Vincenzo Ward, 27, of Stewarts Point said they were surprised to learn that the Santa Rosa Sears store was slated to close.
“It’s going to be a major inconvenience,” La-Rose said, noting that the store was one of the main entrances to the plaza and she still does a lot of shopping there. “They have a lot of nice clothes and a lot of nice items.”
During the last five years, the company lost about $5.8 billion, and over the past decade, it shut more than 1,000 stores. Many of the 700 stores that remain have frequent clearance sales, empty shelves and handwritten signs.
Running low on cash, the company had a $134 million debt payment due Monday. Its total debt stood at about $5.6 billion in late September.
This article was compiled from reports by Staff Writer Martin Espinoza and the New York Times.