Sears Holdings Corp announced disastrous holiday sales which has led many to believe that 2018 is the year that the long suffering Sears Holdings goes out of business–and if not this year, then 2019.
https://americaclosed.com/sears-holdings-expected-go-out-business-following-disastrous-holiday-sales/
@3nsz-STFU
But.....I really don’t get all this negativity. Pebble says we are doing great and all of this is just minor obstacles to us returning to the good days.
You all could do well by spending more time on Pebble vice all of this negative stuff.
@1tug- the cash burn is lessened because they are closing stores but the other side of that is that revenue from those stores is now gone. So while you have less cash burn you also have less cash to pay bills that are fixed cost.
expenses are 30X revenue.
STOP eating those magic mushrooms alice
Fast Eddie cannot bail out Sears on his own. What will push Sears into bankruptcy will be the same thing that happened with Sears Canada — lenders turning Sears’ next save-me plan down. Right now everything depends on refinancing that billion dollar financing package and continuing to get green lit on new lines of credit. Altice is a great example of a company that could do anything, just like Sears, until investors and banks were recently spooked. Now they are dumping assets to survive.
Lenders will see suppliers balking and yanking credit lines, shoppers unlikely to return, and only scraps left to monetize as collateral. When the banks say no, it is over. That will be this year. Even Lampert warns about that in his blog.
I can tell this post was sarcasm within like 7 seconds of reading it...why can't anyone else? There's no need to let it make you angry.
@1ezr Wow you are high on yourself aren't you? Do you feel good about your post and how "smart" you are?
To @Rbt3M19-1tug :
Your prediction for a bright future is misplaced don't you think? But lets address your points individually:
The cash burn has been reduced the last three quarters and the results are improving: Reduction in cash burn is due to closed stores, and mass layoffs ie.. reducing fixed costs.
There might be another round of closing (underperforming stores) butthe goal is to return to profitability this year. How can there be profitability this year? Please review comp store sales for the Holiday period of Nov - Dec: Comp store sales were down 15 - 16%, while competition showed positive growth. Vendors are resistant to stock product! Good luck selling more Everlast shorts to profitability.
The transformation might be working, even if it's not as great as expected most of the jobs will be preserved. SHLD has more than $4B in debt, with only limited assests to sell, some of which must be used to fund the Sears pension. The only thing you are doing is taking further loans, at over 11% interest with your remaining unencumbered stores as collateral.
While your positive attitude is appreciated, please provide facts. SYW, your supposed savior, is a BOP negative BU. It leeches dollars from all the others BU's, with absolutely zero ROI. THAT IS A FACT! EL has no cash flow! Who do you think EL sells all the pharmacies as quick as possible?? The prescription files are instant cash to the bottom line. Please don't talk about SHLD returning to profitability.. Restructuring debt, or delaying payment of debt, DOES NOT alleviate the debt!
Return to profitability? That's just delusional.
Every year it's the same bankruptcy prediction and every year it turns out false.
Sears has some issues but it certainly won't be bankrupt in 2018.
The cash burn has been reduced the last three quarters and the results are improving.
There might be another round of closing (underperforming stores) butthe goal is to return to profitability this year.
The transformation might be working, even if it's not as great as expected most of the jobs will be preserved.
@wwj - You stole the words out of my mouth. There has been so much speculation as to when Sears will die. I have been hearing this speculation for quite a while, actually, I've heard it since I started with the company in 2013.
There is no doubt that Sears Holdings will not go through bankruptcy, we just don't know when. Just as we think "this is it", Lampert comes to the rescue with a cash infusion (loan). I don't think that he will continue doing this for much longer, and most likely, that's when we will enter our final stages of our demise.
He's been doing this since 2014, $500 million here, $100 million there. It all adds up and it is just not sustainable. His potential ROI seems pretty dismal. Retail property is in overabundant supply. Look at what happened in the 2008 real estate crash, thousands of homes suddenly on the market, so home prices went south. Same kind of thing is going to happen with retail real estate. Even Target and Walmart are closing stores; our typical store is an older building located in an area with average or less-than-average potential while their properties are usually newer with more potential, so Lampert is at a disadvantage on that front. Some are "ring-fenced" for pension, others are free for the taking as his collateral in a bankruptcy event, but can he sell them and realize a gain on these transactions?
There isn't a whole lot left in the IP (intellectual property) portfolio. Kenmore and DieHard are all that are left, maybe SYW too and a few "small potatoes" (e.g. Simply Styled). There wasn't exactly a line of companies wanting to buy Craftsman, of which I believe the proceeds of that sale went towards the pension and short term obligations, so who will buy Kenmore and DieHard (and SYW, etc), and in the event of a bankruptcy, assets usually don't go for top dollar.
I'm not even a hedge fund guy and I can see that he has an albatross on his hands. I wonder if or when he realizes this, and if he does realize the huge flop this has been, is he taking strategic steps to salvage as much of his ROI as possible? Is he "underwater"?
The world today is a lot different than it was in 2004. This real estate play has been a losing battle. I'm surprised he didnt just walk away from this a few years ago.
@Rbt3M19-1tdj Yes, much more than enough liquidity. God, why can't you people get this, its not rocket science. Sears has existing cash on hand over and above the $100 M they just secured they also have additional lines of credit and numerous valuable properties that are not mortgaged.
Just be quiet, go to work and stock shelves, ok? Can you handle that? There is nothing to worry about this year. If you're that scared look for another job, theres almost 0 unemployment. If you can't find a job now you got real issues.
Enough liquidity for 2018? Lampert only secured $100 million. That's only enough for 3 weeks of their cash burn! Most quarters suffered a cash burn over $300 million.
There is more than enough liquidity for 2018. 2019 is a different story.
To be fair people have been saying the exact same thing for years..
Oh sears will go bankrupt this year. Oh wait it'll be next year. Oh wait it'll be April 2016. Maybe June 2017. Oh no never mind it'll be July 2017. Oh wait no..it'll be November. Sears won't survive 2017. It goes on and on and on and on...
I don't work for sears anymore but do I think it'll go bankrupt? Yes of course. Will it be soon? Who knows. Every time people seemed to believe the end was near. Especially last year around July. Yet here we are..2018.
My point is that of course sears will go bankrupt at some point. I don't believe sears is capable of a turnaround. But it may or may not be in the coming months.
I think the big box stores are likely to continue to contract, both in number and in size, but SHLD will continue as a holdings company, which it is. Many other divisions and subsidiaries here. People only talk about Sears and Kmart.
There are only two questions left:
When will SHLD file for bankruptcy?
Will they file Chapter 11 or Chapter 7?