New York — An iconic American name for more than 100 years has declared bankruptcy.
Sears filed chapter 11 bankruptcy, Monday, and says it will close 142 stores. Those include a Sears near Youngstown, and Kmart's in Middleburg Heights and East Liverpool.
Once the largest retailer in the U.S., it's gone from more than 3,500 Sears and Kmart stores in 2010 to less than 700 this year.
However, Monday's announcement doesn't mean game over for the company. It's more like they're going into extra innings. The company is still open for business, trying to reorganize and keep several hundred locations alive.
Some companies, like Chrysler, GM and Six Flags have survived bankruptcy. But things can change quickly, which is why consumers still need to protect themselves according to bankruptcy specialist, Howard Rabb, from Dworken & Bernstein.
"If they do a couple things that a judge looks at and says ‘you’re not doing things the way I told you to’, it’s over,” he explained.
According to Sears Holdings, their warranties, protection agreements and appliance servicing are continuing as normal.
Gift Cards are still being accepted. And layaways and exchanges are also continuing as normal.
But Rabb offers this advice:
“If I were a consumer holding $100 dollars in a return or a gift card, I think I would start to take some action and get over to a store.”
The company says it plans to continue its credit card rewards programs, cashback and Shop Your Way Points. But ultimately, that's up to the bankruptcy judge, so you can't count on that.
In fact Rabb says, you might want to use your regular credit card instead of a Sears card, where you know you will get the rewards or points.
And with liquidations planned at the stores on the cutting block, and sales already being advertised online, that could mean big bargains just in time for the holidays.
Rabb points out that, unfortunately, Chapter 11 will also affect the company's 89 thousand employees. And even those whose stores are not slated to close, might want to start looking for other opportunities.
As the company's CEO said...they're “running out of time”.