As one retailer appears poised to emerge from bankruptcy protection, another is entering it.

Sears Holdings’ Chairman Eddie Lampert’s ESL Investments prevailed in a bankruptcy auction early this morning after raising its bid for the company to $5.3 billion. ESL’s bid, which still must be approved by U.S. Bankruptcy Court Judge Robert Drainat hearing on Feb.1, would leave Sears Holdings with 425 Sears and Kmart stores.  ESL also would acquire Sears IP, including the Kenmore and DieHard brands. ESL initially bid $4.4 billion for the chain, which filed bankruptcy last fall, and beat out an offer from Abacus Advisory Group, which proposed liquidation.

Meanwhile, Wisconsin-based general merchandise retailer Shopko filed for bankruptcy protection in U.S. Bankruptcy Court, Omaha, NE, citing “excess debt and on-going competitive pressures” and plans to close 78 of its 360 stores.

Shopko, which is owned by Sun Capital Partners, gained court approval Tuesday for $480 million debtor-in-possession financing from secured lenders. Shopko, with stores largely in rural markets, has struggled with competition from larger retailers like Walmart as well as dollar and convenience stores.