Sears Holdings Corp., owner of the Sears and Kmart retail chains, filed for Chapter 11 bankruptcy early Monday, as it faced a deadline for a sizable debt payment it may not have been able to make.

The company’s store chains may continue to operate and survive while the parent company goes through the bankruptcy restructuring. But two other prominent retailers this year, Toys ‘R’ Us and Bon-Ton Stores, owner of Herberger’s, decided to close their stores while in bankruptcy. A buyer subsequently emerged for some Bon-Ton assets.

Here is a look at five potential effects of a Sears bankruptcy on its operations in Minnesota:


Mall of America: Sears is down to three locations in the Twin Cities, the most prominent as one of the three department-store anchors at the Mall of America in Bloomington. A downsizing or closing of that store would leave the mall with a major piece of real estate to fill just as it is plotting an expansion on the north side that would include more retail, hotel and convention space. On a positive note, malls such as Edina’s Southdale Center have repurposed empty anchor spaces with government offices, fitness centers and other non-retail uses.

St. Paul parking: The Sears store near the Capitol in St. Paul has long stood out because it stands alone. It is not in a mall, nor close to other retailers and it is just far enough from downtown offices to require a drive. But it is just out the back door of some state office buildings and provides parking space for 500 government workers. A parking agreement with the State of Minnesota, in place for more than a decade and worth $196,000 a year, has long been suspected as one reason that the mostly-empty store has remained open. A deputy registrar license bureau also leases space on the second floor of the Sears store. Were the store to close, the property would no doubt attract developers and possibly the state.

Hometown stores: Few, if any, of the Sears stores outside the metro will close due to a bankruptcy. Fourteen non-metro stores in cities from Alexandria to Willmar are independently-owned stores known by the label Sears Hometown. They carry only hard lines, such as appliances and lawn and garden tools, but they can order other items, such as apparel, from the full-line stores. “My stores are not closing even if Sears goes bankrupt,” said Wendy Hamm, who owns two Sears Hometown stores in Cambridge and Forest Lake. “I’m getting a lot busier now that some of the Twin Cities stores have closed.”

Kmart: There are four Kmart stores in Minnesota, in Minneapolis, St. Paul, International Falls and Rochester. The Minneapolis store has long been controversial because it cuts off Nicollet Avenue from Lake Street. The city spent $8 million, most of it last year, to buy the 10 acres of land the store sits on in hopes that one day the store can be relocated and Nicollet reopened through it.

Product service: Before Sears Holdings enters bankruptcy, there may be a deal by Sears chairman Edward Lampert to acquire its Kenmore appliance brand. That would likely mean that owners of Kenmore products will continue to get warranty coverage and service. Last year, Sears sold its Craftsman tools and equipment to Stanley Black & Decker. It took over service for those products and started selling them in other retailers, such as Lowe’s.


John Ewoldt and Evan Ramstad