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Sears’ largest shareholder Hometown and Outlet Stores took action Monday to prevent the retailer from liquidating more than 80% of its stores.
Eddie Lampert – who owns 58.8% of Sears Hometown and Outlet Stores and has been thwarted in his bid to acquire the remainder – revealed in a public record that the retailer’s board was due to vote Monday afternoon “for decide to liquidate the Hometown segment of the Enterprise. “
The retailer had 549 Hometown stores and 128 Outlet stores as of February 2, according to a separate public record.
Hometown stores suffered, recording a 6% drop in sales at stores open for at least one year, in fiscal 2018.
Sears Hometown and Outlet Stores was previously part of Sears Holdings, which owned the Sears and Kmart chains before its recent Chapter 11 bankruptcy and sale to Lampert’s ESL. Sears Hometown and Outlet Stores formed their own publicly traded company in 2012.
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The retailer suffered collateral damage from the Chapter 11 bankruptcy of its former parent company in October, citing questions from the public about “the company’s ability to operate.”
Lampert recently offered to acquire the portion of Sears Hometown and Outlet Stores that he does not own for approximately $ 21 million. But the retailer rejected this proposal.
In response to their stalemate, Lampert ousted board members William K. Phelan and David Robbins on Monday and replaced them with Alberto Franco and John Tober.
He also proposed imposing a requirement that 90 percent of the seven board members must vote to liquidate, and they must do so in two separate meetings at least 30 business days apart.
A representative from Sears Hometown and Outlet Stores was not immediately available for comment.
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The clash comes about two months after Lampert’s ESL acquired the assets of Sears Holdings following the Chapter 11 bankruptcy, preventing a total liquidation of the owner of the Sears and Kmart brands. Lampert was previously the largest shareholder, CEO and chairman of Sears.
Lampert argued in a letter to members of the board of directors of Sears Hometown and Outlet Stores on Monday that the liquidation of the company’s Hometown stores would not be in the best interests of shareholders and others involved in the company.
“Any decision to wind up the hometown business would also have a negative impact on many other stakeholders in society, including the many hometown owners and their families, who have supported the company for over 25 years,” as well as their employees and the communities they serve, âLampert wrote.
He said the legal entity he used to acquire Sears and Kmart in bankruptcy, known as Transform Holdco, would do a better job of managing and investing “to preserve Hometown’s store network. and encourage these longtime owners to continue to operate their businesses. “
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.