Sears, once the largest retailer in the world, has narrowly avoided liquidation. Here's how its downfall played out. (SHLD)

Business Insider/Hayley Peterson

• Sears' chairman, Eddie Lampert, has won a bankruptcy auction to keep the 126-year-old retailer from liquidating. Lampert's hedge fund, ESL Investments, said last week that its bid of more than $5 billion would save up to 50,000 jobs and keep about 400 stores open.
• Since filing for bankruptcy in October, Sears has been facing a possible liquidation. 
• The department store has been losing money and closing stores for years. Many employees and analysts blame Lampert for the retailer's decline.

Sears has narrowly avoided liquidation.

Sears' chairman, Eddie Lampert, won a bankruptcy action to keep the retailer from liquidating, according to a person familiar with the matter. Reuters was first to report about the bid's acceptance early Wednesday morning. Lampert's hedge fund, ESL Investments, said last week that its bid of more than $5 billion would save up to 50,000 jobs and keep about 400 stores open. 

The bid still needs to be approved in bankruptcy court. 

Sears has been battling with a possible liquidation since it filed for bankruptcy in October and Lampert stepped down as CEO.

"Over the last several years, we have worked hard to transform our business and unlock the value of our assets," Lampert said in a statement to the press at the time. "While we have made progress, the plan has yet to deliver the results we have desired, and addressing the Company's immediate liquidity needs has impacted our efforts to become a profitable and more competitive retailer."

Since then, American consumers have been lamenting the loss of what was at one point the world's largest store and considered to be an early innovator of the shopping landscape.

Keep scrolling to see the story of its downfall in photos:

Sears started off as a mail-order catalog company selling watches and jewelry in 1888. It became the largest catalog company in the United States after expanding its assortment.

In the 1920s, as catalog shopping started to fade out, Sears adapted to the changing times and opened stores. According to Investopedia, sales at its stores outpaced catalog sales by 1931.

Source: Investopedia

The company grew from being only a retailer to offering financial services, including setting up an insurance arm with Allstate and acquiring various financial brokerage firms.

It also began rolling out its own brands such as Craftsman, DieHard, and Kenmore.

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SEE ALSO: Decaying stores, plunging sales, and a remote CEO: How Sears was driven to the edge of bankruptcy