The merger of Kmart and Sears closed on March 24, 2005, following affirmative shareholder votes of both companies.

On October 10, 2018, it was reported that Sears Holdings had engaged advisors regarding an imminent bankruptcy filing.

[9][10] The company filed for Chapter 11 bankruptcy protection on October 15, 2018, in New York; the same day that a $134 million debt payment was due.

[16] On January 15, 2019, when it had appeared that Sears Holdings was preparing to file for Chapter 7 liquidation, the bankruptcy court judge ordered the company to return to negotiation table and work out a new deal with Eddie Lampert to prevent the liquidation from occurring.

[17] On January 19, 2019, Sears Holdings officially announced that they had won the auction, and that some of the then existing stores were to remain open.

[18] On January 24, 2019, a group of unsecured creditors, which included Simon Property Group, filed a motion with the bankruptcy court to overturn the deal Sears Holdings had recently made with Lampert claiming that Lampert had been "engaged in serial asset stripping" of the company at the expense of suppliers and landlords.

[19] On January 28, the federal government-operated Pension Benefit Guaranty Corporation announced that they were not in favor of the current Sears Holding agreement with Lampert since that agreement would create a $1.7 billion funding gap in the employee pension fund that would require the American tax-payers to cover the shortfall.

[21] In February 2019, it was announced that a U.S. bankruptcy judge approved the sale of the most lucrative part of Sears Holdings to Edward Lampert allowing the surviving part of the company that operates both Sears and Kmart to remain in business at the expense of suppliers, landlords, employees, pensioners, the U.S. government, and other creditors.

[30] On February 6, 2020, Transformco announced an additional closure of 15 Kmarts and 26 Sears, effective to close around April 2020.

[citation needed] Throughout June and July 2020, Sears' job website has indicated that over twenty more stores are closing.

[32] The property was eventually sold to data center developer in the Summer of 2023 with plans to have the existing buildings demolished by Fall 2023.

[34][35] On January 21, 2022, the last remaining Searstown in Fort Lauderdale, Florida abruptly closed at the end of the day without any prior announcement or liquidation.

[39][40] On September 22, 2022, it was announced that Sears would be closing at the Valley Mall in Union Gap, Washington, by Sunday, November 20, 2022.

[43][44] On October 15, 2022, it was announced that the only remaining Kmart store in Puerto Rico at the Plaza Las Americas would be closed by the end of that month.

[45] The last Sears in Maryland closed its store at the Francis Scott Key Mall on January 15, 2023.

"[51] In an earlier statement, Carr stated that "Transformco continues to pursue opportunities to create value from its real estate portfolio and to partner with retailers, property owners and communities as part of the ongoing reinvention of retail real estate.

[28] In January 2020, The Wall Street Journal reported that Sears Hometown franchisees were having trouble getting needed inventory from Transformco and also being penalized if they tried to match prices on products sold on Sears.com.

[84] In June 2020, a group of 19 Bangladeshi suppliers filed a $40 million lawsuit against Transformco for canceled orders that had already been shipped and stuck in American warehouses.