Thread regarding Sears layoffs

I like turtles.

@SPUd2o5-dha Oh yeah, not a doubt in my mind. Killing Kmart was only to keep things going for maybe another year or two for Sears (at most) and that's about it.

"Yup, as I said, Kmart's going to be sacked to keep Sears alive"

Sears will go down too. Killing off kmart will only by Lampert more time to squeeze whatever assets left with Sears.

Yup, as I said, Kmart's going to be sacked to keep Sears alive.

@SPUd2o5-wis It's a Bloomberg intelligence article. You cannot access it unless you subscribe to Bloomberg's terminal news service. They can reprint WSJ stuff, so it looks like the original poster cut and pasted the summary from the former along with about 50% of the latter. WSJ updates stories frequently, so more details may get added to the original story.

Kmart's upcoming demise has been all over the Wall Street analyst research notes for about a week or two now. Sears just hired another liquidator just to handle what is apparently a large number of forthcoming Kmart store closures in New York and Pennsylvania that haven't been announced yet. Some of these people hire private detectives, dumpster dive, and pay serious money for leaked information to get pre-press intelligence about retailers they sell to competitors at subscription prices you wouldn't believe. The best stuff runs about $5,000 a year and up. Some major city libraries -may- have Bloomberg terminals. A lot of business schools do.

Thanks for posting, @SPUd2o5. I read the WSJ article, but the first part of this post is not there. Is it from another article? Trying to find as much info on this as I can.

If you look at this carefully, he is offering to transfer ownership of the remaining Sears retail locations to his hedge fund, thus liquidating Sears' last available significant asset -- its remaining real estate holdings. That $1.2 billion in debt is owed to him, of course, so that isn't much of a transfer.

It is the final chapter for Sears and Kmart. Lampert has systematically transferred the assets of this publicly-traded company to his own investment fund through this proposal and his Real Estate Investment Trust.

What is left of Sears will then be paying rent to Lampert. But Sears' suppliers (and lenders) saw Sears' property assets as the only thing that made them creditworthy. Once those assets are gone, no supplier will send merchandise without upfront payments -- which Sears is now too cash poor to manage. So shortly after this asset stripping gets approved by Lampert's hand-picked board of directors, the business will go bankrupt because there is no way it can operate with basically no significant remaining assets. When that happens, Eddie will be first in line to liquidate real estate to repay secured debt and sell off Sears' remaining valuable brands. Other creditors and vendors will get stiffed with no credible recovery option.

Forget about Kmart -- that chain was well on the way to total shutdown at least a month ago when Eddie stopped talking about it. This is a much bigger problem.

Here is the official statement from Sears Holdings:

http://searsholdings.com/press-releases/pr/2091

Wall Street analysts immediately noted this is yet more confirmation Kmart is a dead-chain-walking, because Lampert only offered to help finance or acquire retail Sears locations, not Kmart.

"His proposal clearly omits any mention of the iconic Kmart chain, which can only be interpreted one way: total imminent liquidation or spinoff to a third party, the latter of which we see as extremely doubtful. We are advising our clients in a retail note to expect final liquidation to commence by the start of Q3 2018 to allow for an orderly wind down of the Kmart business. The future of Sears retail will be a shadow of its former self. We predict the company will retain ~300 retail locations at most." -- Susquehanna Investments