Last week, Edward Lampert, CEO of Sears Holdings, lambasted the press for adding doom to the company’s undeniable gloom with reports of its imminent demise. At the company’s shareholder meeting, he reportedly said news outlets have been “unfairly singling out” Sears’ issues, according to Reuters.
This week, the executive is taking aim at a different group in a new post on the company’s blog: opportunistic suppliers.
Lampert said Sears will not “roll over” as suppliers try “to take advantage of negative rumors about Sears to make themselves a better deal–a deal that is unilaterally in their interest.”
In an effort to protect the company and its stakeholders, he called out One World, a subsidiary of Techtronic Industries that makes power tools under the Craftsman label, for attempting to breach its agreement and for making unreasonable demands.
“One World has informed us of their intention to take the very aggressive step of filing a lawsuit against us as they seek to embarrass us in the media to force us to let them out of their contract,” he said.
Sears, Lampert said, has no reason to be embarrassed and informed the vendor that it was prepared to take legal action of its own, which the company did shortly after the post was published, according to the Chicago Tribune.
Lampert said Sears helped One World build its tool business over the past nine years. He said Sears has paid the vendor more than $868 million and is fully capable of meeting future obligations. This despite Sears’ reported $596 million in debt that’s due this year and another $1.29 billion that matures in 2018.
The issue at hand, according to Lampert, is if One World were to stop supplying Sears, it would be able to increase its business with the department store’s competitors, making sales of Craftsman products that much more difficult.
“As I have said, I believe Sears Holdings can continue to operate as a very significant member-centric integrated retailer with a large number of stores as long as we receive the support of our vendors and other stakeholders,” he said. “It is important to note that we purchase more than $13 billion a year in goods and services to offer our members in Sears and Kmart in-store and online.”
This skirmish follows reports in March that Sears’ suppliers were pulling back, warned of the possibility that Sears might not be able to meet its financial obligations or secure any additional funding to do so.
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