Bankruptcy Looms As Sears Warns "Will Consider All Options" If New Financing Process Fails

Sears Holdings, the one-time giant retailer that has been teetering on the edge of bankruptcy for years now, announced this morning that, following yet another disappointing holiday season (shocking), they've initiated new discussions with lenders aimed at renegotiating terms on some $1 billion of "non-first lien debt." 

According to a press release from the company, the debt concessions would be accompanied by another $200 million of cost cuts.

Sears Holdings Corporation announced today it has raised $100 million in new financing and is pursuing an additional $200 million from other counterparties. In addition, Sears Holdings has amended its existing second lien notes, maturing October 15, 2018, to increase their borrowing base advance rate for inventory and defer their collateral coverage test and restart it with the second quarter of 2018, and is in discussions with certain lenders regarding additional transactions to improve the terms on potentially more than $1 billion of its non-first lien debt.

The Company also outlined incremental actions to further streamline its operations to drive profitability, including cost reductions of $200 million on an annualized basis in 2018 unrelated to store closures.

Rob Riecker, Sears Holdings' Chief Financial Officer, said: "As previously announced, we are actively pursuing transactions to adjust our capital structure in order to generate liquidity and increase our financial flexibility. The new capital we have secured represents meaningful progress towards those objectives and demonstrates that we continue to have options to finance our business."

Of course, the most important part of this morning's press release is the following statement which serves as a not so thinly-veiled threat to junior creditors that any failure to grant financial concessions could result in a bankruptcy filing.

However, should the Company's efforts to complete these transactions not be fully successful, the Board will consider all other options to maximize the value of its assets.


The company also announced that November and December comp-store sales plunged 16%-17% year-over-year indicating that restructuring efforts implemented to date have done little to slow mounting losses. Sears’ disastrous holiday sales mark a sharp contrast to the solid gains enjoyed by many of its department store peers such as Kohl’s, J.C. Penney and Macy’s.

Meanwhile, Chairman and CEO Eddie Lampert reiterated in a blog post this morning that "many observers," including "outside lenders and our vendor community" aren't convinced that Sears can survive the "Retail Apocalypse." 

While these actions have so far helped our Company survive the so-called “Retail Apocalypse”, many observers are not persuaded that Sears Holdings can be a viable competitor in the long term. It is obvious that to overcome such skepticism and obtain the support of outside lenders and our vendor community – which is crucial to the success of any retailer – we need to undertake further measures.

However, should our efforts to complete the refinancing not be fully successful, the Company’s Board will consider all other options to maximize the value of Sears Holdings’ assets.

Oh well...vendor support isn't that big a deal for retailers anyway, right?

Of course, as Sears management continues with their futile efforts to effectuate a restructuring via store closings and cost cuts, the far easier and faster solution, as demonstrated by Kodak, is right in front of their eyes...


snblitz peopledontwanttruth Wed, 01/10/2018 - 15:02 Permalink

My father-in-law passed not too long ago and I was going through his garage at the request of his wife. All the ancient Craftsman power tools (drills, jig saws, etc) still work. I have a angle grinder from the 60s that is still going too.

On the other hand, more recent craftsman tools are hard to discern from Chinese stuff.

Have you noticed that Harbor Freight has put a lot of effort recently into "up qualitying" some of their product lines?

In reply to by peopledontwanttruth

Froman JimmyJones Wed, 01/10/2018 - 13:56 Permalink

Will not happen as long as that douche Lambert is in charge.  Sears was Amazon before there was an Amazon with their Sears Catalogue.  If they had any foresight in the 1990s when the internet was first gaining momentum they could have put their entire catalogue on the internet, used their already in place vast distribution system along with some of their brick and mortar outlets and arguably they would not be in the shape they are in now.  But selling inferior Chinese items, providing horrendous customer service, a complete douche for a CEO, and stores that have not been updated since the mid-70s created the perfect storm.  If it were a lame horse it would have been put down 10 years ago.

In reply to by JimmyJones

snblitz Froman Wed, 01/10/2018 - 15:05 Permalink

When I was given the Amazon and (the other company, I forget) prospectuses I immediately pointed to Sears who had the entire market sewn up and could simply put their catalog online and erase these upstarts and their "new" ideas.

Well I was completely wrong.

1) Sears was never able to get the catalog "online" in a consumer friend way.
2) Amazon has been able to run a profitless model for years destroying companies that ran on the profit model.

In reply to by Froman

AGuy JimmyJones Wed, 01/10/2018 - 15:02 Permalink

Sears could just start making Craftsman tools in the US, probably would turn them around.

I doubt it. Harbor frieght stores are openning everwhere. No way Craftsman tools are going to complete especially when HF offer free tool replacement like snap-on does. I don't think Sears even owns Craftsman, and to be honest, Craftsman tools have never been quality tools. Some of the HF stuff is better quality than Craftsman.

In reply to by JimmyJones

rejected Bigly Wed, 01/10/2018 - 14:11 Permalink

Won't work so long as Amazon can continue to operate without making profit undercutting conventional retail.  Brick and Mortar has to have higher prices to cover employment and building costs. Since EVERYTHING comes from China there is no way a B&M store can compete. The only difference between Sears and Harbor Freight/Walmart is prettier boxes.

Sears, JCP and Monkey Wards used to be a notch or two higher than discount stores and people USED TO buy with quality in mind. Today the younger generations think only in terms of cheap. Quality is 'old school'. For them buying 5 coffee pots at $10 is better then 1 coffee pot at $35 because they think they are getting the latest in technology. The same reason they ALWAYS buy the latest IPhone or Tablet.

Another is previous generations maintained their equipment. Cars for example required decent tools. Today they lease the car then shove it off on some other unsuspecting soul when the lease is up. All the maintenance is done by someone else whether it's Autos or homes... No decent tools required.

And finally, the latest homeless clothing styles doesn't require you to try them on. Anything works. I used to buy quality tailored boot cut Levies. Can't be found in today's no style clothing racks. The NEW RELAXED homeless look with tears and already bleached out is all the rage.

It appears at this stage the only local stores left will sell groceries and even those will only sell stuff that cannot be shipped. Glad I am on my way out,,, I couldn't stand such a boring useless life spent on some social site texting back and forth.  

In reply to by Bigly

LawsofPhysics shizzledizzle Wed, 01/10/2018 - 12:50 Permalink

The truth is always stranger than fiction.  This is essential exactly what they did in the 70's with the introduction of the "Searscard"!!!!!

Nothing new under the fucking sun and now that fraud is the status quo, if you cannot find greater fools, you just make them up and give them all the credit you want. The kids are all about augmented reality already!!!!

In reply to by shizzledizzle

Drop-Hammer shizzledizzle Wed, 01/10/2018 - 14:08 Permalink

Wow, these kike cunts have been stringing out Sear's demise for decades.  Each transaction they conduct, like this lame attempt to 'restructure debt', results in these Sears kikes and the (((financial entities))) and their brokers, bankers, traders, et al working the deals to all profit off of the skim (commissions, fees, etc.) and continue to parasitize Sears.  Rotten blood-sucking kike parasites.  

In reply to by shizzledizzle

buzzsaw99 Wed, 01/10/2018 - 12:55 Permalink

sears needs an eddie change.  i propose swapping munster for lampert.

Gee, Grandpa, what are we gonna do if we can't get finance concessions?