Suppliers Are Concerned That Sears Can’t Pay Its Bills


The holiday season is crucial for American retailers, and Sears is trying to make sure that they actually have some merchandise on the shelves in case any customers wander in on their way to another store from the vast, empty parking lot. Filling those shelves will be harder: there are reports that suppliers have less confidence in Sears’ ability to pay its bills than they used to.

Sears, of course, has been hurrying to free up some cash to get it through the next year or so. To get through the holidays, the company is borrowing $400 million from chairman, CEO, and head manifesto-writer Eddie Lampert’s hedge fund, and is also selling most of its 51% stake in Sears Canada… largely to Lampert’s hedge fund as well. Since the announcement of the secured loan, the failed Sears Canada auction, and the Sears Canada rights offering, the experts whose job it is to decide how doomed a company is are a little more suspicious of Sears.


Suppliers want to get paid. That’s the point. When they’re concerned that a financially shaky retailer might not be able to pay them, they buy insurance. Since insurance companies read business news, too, Reuters reports that the companies that provide this kind of coverage have limited how many shipments to Sears they’re willing to cover.


Still, things aren’t looking good. The last time Sears turned a profit during the last quarter of the year (that’s to say, the holiday season) was 2011.


Sears: Why the troubled chain’s vendors are worried [Reuters]




by Laura Northrup via Consumerist

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