2016 is ending on what has become a familiar note for Sears.
As it prepares to close more stores, the struggling retailer has secured a letter of credit. Once again, ESL Investments, Inc.—for which Edward Lampert, Sears Holdings Corporation’s chairman and CEO, is also the chairman and CEO—has come to the rescue. Citibank, N.A. served as administrative agent and issuing bank.
The secured standby letter of credit is for an initial amount of $200 million, which may be expanded up to a total of $500 million. The move provides the parent company of Sears and Kmart stores with liquidity to continue operations.
“This new standby letter of credit facility further demonstrates that Sears Holdings has numerous options to finance our business strategy,” said Jason M. Hollar, Sears Holdings’ chief financial officer.
This comes just one day after Business Insider reported more than 30 Sears and Kmart stores will shutter in early 2017. The locations include 24 Kmart doors and eight Sears stores across nine states.
The move brings the total closures for the former retail powerhouse to 200 in this fiscal year. That’s a 60 percent drop since 2011, when the company operated more than 3,500 stores.
The closures are an attempt to cut overhead and slow losses. In its third quarter report, released December 8th, the company posted a net loss of $748 million for the quarter, compared to a $454 million loss for the prior year period. Revenues fell $721 million to $5 billion.
Comparable store sales fell by 4 percent and 10 percent at Kmart and Sears, respectively, for the same period.
At the time, Hollar assured investors that the retailer was committed to managing business and meeting financial obligations.
The number of retailers that have thrown in the towel through early April 2017, falls just short of the total number of stores that folded throughout all of 2016. And the number of bankruptcies is likely to increase—potentially threatening businesses in related industries as a result.Read more
The numbers are in, and it turns out that resale shops--especially resale sites and apps--are doing a better job of suiting consumer tastes than traditional stores.Read more
As fashion’s high-tech future nears, the industry is recognizing a group of creative mavens for their advanced business initiatives.Read more
Despite its command of the e-commerce space, most Amazon sellers are still trying to diversify their options, and many, it seems, may be turning to Walmart.Read more
Less than one month after the exit of president, executive creative director and long-time muse Jenna Lyons, contemporary fashion retailer J.Crew Group announced today that it is undergoing strategic changes, which include trimming its ranks.Read more
Once the purview of independent designers, “green” textiles are no longer relegated to the sidelines; they're now reshaping traditional supply chains and closets.Read more