Sears Hometown Files For Chapter 11 Bankruptcy Protection - Closes 600 Stores in Three Years

Sears Hometown Stores Inc., which is a franchise-owned spinoff from the original Sears, has filed for Chapter 11 bankruptcy protection.

Photo by(Mike Kalasnik/flickr)

Information in this article is sourced from cnn.com, wtop.com, and searshometownstores.com.

Sears Hometown

Sears Hometown is also known as 'The Other Seers.' At one point, Sears Hometown had more significant potential than the original Sears because it wasn't insolvent and had a strong focus on home products. Added to this was its smaller store size, which meant reduced overheads. However, that potential wasn't realized, and now Sears Hometown is filing for bankruptcy protection.

wtop news covers the development in the following words,

"Sears spun off Sears Hometown in 2012 to give the parent company a much-needed infusion of cash. The average Sears Hometown store is only 8,000 to 10,000 square feet, a fraction of the size of the average full Sears, which is about 160,000 square feet. The chain concentrates on selling appliances, tools, and outdoor equipment."

The article goes on to say, "Roughly 100 Sears Hometown stores are currently operating — down from 700 just three years ago. The bankruptcy filing lists assets of less than $50 million and liabilities of at least $50 million. It also lists Eddie Lampert, the CEO of Sears’ holding company Transformco, as a 37.75% owner of Sears Hometown. Sears Hometown never stopped depending on Sears Holdings for just about everything. Most of its goods, logistics, and advertising support came from Sears Holdings."

This development is a bit of a bummer for the franchise owners, especially Eddie Lampert who has a 37.75% stake in the company.

What do you think?

What are your thoughts on Sears Hometown filing for Chapter 11 bankruptcy protection? Have you ever shopped at Sears Hometown? Please let me know what you think in the comments below.