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December 21, 2018updated 24 Dec 2018 8:38am

Sears to incur $443m charges due to store closures

US-based department store chain Sears Holdings (SEC) will assume a charge of $443m from the permanent closure of its 142 stores.

US-based department store chain Sears Holdings (SEC) will assume a charge of $443m from the permanent closure of its 142 stores.

The 125-year-old bankrupt store stated this in a regulatory filing.

Reuters reported that around $229m of the total charges have already been incurred in the Q3 and the remaining charges will be accounted in the Q4 of fiscal year 2018.

The company incurred $229m for the closure of 73 Sears stores and 28 Kmart stores.

The charges assumed include severance costs, markdowns and lease termination costs due to store closures. The company announced these costs in October.

Along with its subsidiaries, Sears Holdings filed voluntary petitions for relief under Chapter 11 in October in a move to establish a sustainable capital structure, continue streamlining its operating model, and grow profitably.

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“The charges assumed include severance costs, markdowns and lease termination costs due to store closures.”

In October, Sears received commitments for $300m in senior priming debtor-in-possession (DIP) financing from its senior secured asset-based revolving lenders.

The US Bankruptcy Court for the Southern District of New York also approved the retailer’s first day motions for its voluntary Chapter 11 restructuring, as well as authorised it to access its $300m senior priming debtor-in-possession (DIP) financing from its senior secured asset-based revolving lenders during the same month.

In November, the US-based department store chain received approval from the US Bankruptcy Court for the Southern District of New York to raise $350m in bankruptcy financing.

Earlier this month, the company’s chairman Eddie Lampert submitted a $4.6bn bid through his hedge fund ESL Investments to save the firm from bankruptcy, which will save 50,000 jobs out of the total 68,000.