Sears doesn’t think it’s dead just yet.
The fallen retailer said Monday in its new bankruptcy protection filing that it sees the potential to leave as many as 400 stores open after its reorganization in the courts. Sears (SHLD) notes that these 400 stores are profitable on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis.
“The Debtors believe that there is a viable path forward for a reorganization around a smaller footprint of profitable stores,” Sears said in its filing. Sears said it intends to sell these 400 stores as a going concern in an effort to preserve the Sears and Kmart brands. ESL Investments, led by now former Sears CEO and the company’s largest shareholder Eddie Lampert, is pegged as the stalking horse bidder for these stores. the filing stated.
“A successful sale of these viable stores as a going concern not only will save Sears and Kmart (as defined herein), but also the jobs of the tens of thousands of employees that depend on the continued operation of such stores,” the filing said.
But for a retailer that has become practically irrelevant in the age of Amazon, the long-term outlook for these 400 brick-and-mortar sites isn’t good. The stores, like many Sears and Kmart locations, have likely lacked the critical investments needed to stay competitive. Further, there is no assurance vendors will support the stores after the company’s headline-making bankruptcy.
Also not helping confidence among vendors: Sears said in its bankruptcy filing that it’s currently burning through $125 million in cash a month.
The 125-year old former retail icon filed for Chapter 11 bankruptcy protection early Monday, crippled from years of losses and mounting debt. Sears plans to close about 142 money-losing stores by year end. The company operates about 700 Sears and Kmart stores.
Sears lined up $1.875 billion in bankruptcy financing to extinguish its existing loans and keep the lights on at the chain through the holiday season. CEO Lampert will step down, but remain as chairman.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi