Sears CEO to Give $200M to Struggling Retailer
Sears Holdings Corp. CEO Eddie Lampert is opening his wallet once again to help keep the struggling retailer in business. Lampert, a hedge fund manager and Sears’ biggest investor, will offer a $200 million letter of credit to the department store chain through affiliates of his firm, ESL Investments Inc. The amount could be expanded to as much as $500 million with the consent of lenders, according to a statement last week. The move signals that Lampert remains committed to bankrolling Sears, even as the business suffers from dwindling sales and billions in red ink.
Total Retail’s Take: On one hand you almost have to admire the commitment of Lampert to restoring Sears to its glory days (or at least a profitable business), while on the other you have to question his sanity for continuing to pump money into the slowly dying brand. Sears, like many other traditional brick-and-mortar retailers, has struggled to adapt its business to compete with digital-first brands. Furthermore, declining store traffic and expensive leases from a nationwide network of stores is a combination that’s leading to more losses for Sears. The company needs to raise roughly $1.5 billion to make it through 2017 comfortably, according to Christina Boni, an analyst at Moody’s Investors Service.