Many consumers in Massachusetts have likely shopped at Sears stores at least once over the years. However, industry experts say that this may soon come to an end. Sears may have no choice but to file for business bankruptcy in the near future.
Sears was recently downgraded by Fitch, a major credit rating agency, after the retailer announced that it was planning to exchange some tranches of its debt. S&P Global also downgraded the company, considering its debt restructuring announcement to be distressed since lenders may end up receiving less than what they were originally promised. This is a stark contrast from Sears’s position years ago after being founded back in 1886.
One could say that Sears was essentially the Amazon of that time. Sears has since gone through the closing of thousands of stores and has laid off large numbers of employees who have worked there for long periods. Other retailers have also been suffering in today’s current business environment, such as Kohl’s, Macy’s and J.C. Penney. However, these three companies recently experienced upticks in their sales, so their futures look a bit brighter than Sears’s.
Sometimes companies in Massachusetts and other states cannot overcome their debt issues, so their liabilities end up outweighing their assets. This can easily happen due to shifting market conditions or changing demand in a particular industry, for instance. However, filing for business bankruptcy may provide a struggling business owner with the financial relief and second chance he or she needs to succeed in today’s competitive business world.
Source: thestreet.com, “Top 4 Reasons Sears Could File Chapter 11 Bankruptcy in 2018,” Michelle Lodge, Jan. 25, 2018