Sears Hometown Stores Inc., an affiliate of the once-formidable retailer that sells home goods through locally owned stores, made its first bankruptcy court appearance Wednesday as it begins shutting down.
(Bloomberg) — Sears Hometown Stores Inc., an affiliate of the once-formidable retailer that sells home goods through locally owned stores, made its first bankruptcy court appearance Wednesday as it begins shutting down.
“What is happening here is this company is going out of business,” Mark Minuti, an attorney for Sears Hometown, said during the company’s first bankruptcy hearing. “Make no mistake about it: this is a sad day for our company.”
Sears Hometown supplies hardware and appliances like dishwashers and lawnmowers to independently owned Sears-branded stores, which then get a commission for selling the merchandise. The bankruptcy will deprive those store owners of their sole supplier, Minuti said.
The company’s sales have fallen and costs have risen in recent years, according to court papers. Then, in October, Sears Hometown ran afoul of a debt covenant embedded in a credit line with PNC Bank NA, and part-owner and major supplier TransformCo began restricting the shipment of new inventory.
Sears Hometown filed for Chapter 11 bankruptcy on Monday, listing assets of no more than $50 million and liabilities of at least $50 million in its bankruptcy court petition. The unit wasn’t part of Sears Holdings Corp.’s 2018 bankruptcy.
The case is Sears Authorized Hometown Stores LLC, 22-11303, U.S. Bankruptcy Court for the District of Delaware.
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