Sears Hometown, a branch of the retailer selling mattresses, appliances, home goods, tools, hardware and lawn and garden equipment, filed for Chapter 11 bankruptcy Tuesday. According to the petition filed in Delaware, the retailer listed assets of no more than $50 million along with liabilities of at least $50 million.
The Chapter 11 filing will allow Sears Hometown to continue operating while working on a plan to repay creditors. According to the declaration filed by Sears Hometown CEO Elissa Robertson, the company intends to use the process to liquidate merchandise at locations owned by their dealers.
Among the 20 creditors listed on the filing, Costco Innovel Solutions topped the list with an unsecured claim of $1,124,404.87. BDO Seidman LLP, Cheng Cohen LLC, Whirlpool and Dish Wireless Holdings were among other creditors on the list.
Sears spun the Hometown brand off in 2012 in an effort to raise cash for the struggling parent operation, and it wasn’t included in Sears Holdings Corp.’s 2018 bankruptcy. Hometown was purchased in 2019 by Transformco, a retail outfit owned by former Sears CEO Eddie Lampert which also operates the ailing Kmart brand. Creditors recently secured a financial victory in their four-year lawsuit against Sears Holding, though suppliers have struggled to collect what they’re owed.
Over the past three years, Transformco has closed multiple Sears Hometown stores and sold off signature brands such as Craftsman, which is now owned by Stanley Black & Decker, and DieHard, which is now owned by Advance Auto Parts.
Sears Hometown stores are significantly smaller than a typical Sears, around 8,000 to 10,000 square feet as opposed to 160,000 square feet. Around 100 Sears Hometown stores are still in operation, down from 700 three years ago. Around 15 full-line Sears stores remain.