As other retailers around it go out of business or reorganize, Sears Holdings, parent company of Kmart and Sears, is still in business somehow. Why? Those other chains don’t have what SHC does: A massive base of stores that it owns and can sell, and a CEO able to lend the company a few hundred million here and there.
The manifesto-writing chairman and CEO of Sears Holdings, Eddie Lampert, is also the company’s biggest investor. He rarely visits the company’s headquarters in the Chicago suburbs, and doesn’t seek out publicity, with the exception of a recent interview with the Chicago Tribune where he discussed the current state of the company, and how he wishes that the media would stop speculating that the company is about to file for bankruptcy.
The $200 million from Lampert’s hedge fund, ESL Investments, is meant to give the company some financial breathing room. Loans from the $200 million line of credit last for 151 days. This will probably not ease suppliers’ fears that the company will default on its debts and fail to pay them for merchandise.
“This facility is intended to provide the Company with the flexibility to generate additional liquidity on an as-needed basis,” the company said in a statement about the new line of credit to CNBC.
That gives the company more financial room and more time to sell more of its property to a retail real estate investment trust largely owned by Lampert. The company has continued to close stores across the country, shuttering mostly its Kmart discount stores.
ESL Investment is also in talks for some kind of deal with Sears Canada, which filed for the Canadian equivalent of Chapter 11 bankruptcy last month and is seeking refinancing of its debt or a sale. The fund is already a major investor in Sears Canada.
by Laura Northrup via Consumerist
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