NEW YORK – Sears Holdings Corp. is adding a restructuring expert to its board, suggesting the ailing retailer may be preparing to take significant actions to survive or to protect its remaining assets.
The Hoffman Estates company, which also owns Kmart, said Tuesday it was bringing on board Alan Carr, managing member and CEO of Drivetrain LLC, a restructuring advisory firm. In a release, Sears said Carr has significant experience as a principal, investor and adviser leading complex financial restructurings, as well as serving as a director of reorganized businesses in the U.S. and Europe. Carr was previously an attorney at Skadden, Arps, Slate, Meagher & Flom LLP and Ravin, Sarasohn, Baumgarten, Fisch & Rosen.
The announcement was made as Sears, led by CEO and Chairman Eddie Lampert, is nearing a key debt repayment in less than a week.
"I don't think it is an immediate drive to bankruptcy, but clearly the options are limited," said David Tawil, president and co-founder of Maglan Capital, which follows distressed companies. He says he thinks Sears could be looking at a big liquidity infusion or restructuring debt.
Last month, ESL Investment, the hedge fund owned by Lampert, urged the retailer to sell $1.5 billion more in real estate and restructure $1.1 billion in debt to avoid bankruptcy, according to the filing with the Securities and Exchange Commission. Lampert is the company's biggest shareholder.
In August, the board said it was weighing an offer from Lampert that Sears should sell its Kenmore brand and said ESL might offer to buy it if it was willing to sell.
The company has closed hundreds of stores and has put other famous brands on the block as it burns through money and sees more customers abandon its often-neglected stores.
In afternoon trading, Sears shares lost 6 percent to 58 cents.