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.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.