Probably got a couple week / month reprieve - why announce more closings when can allow BK process to do it
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They will continue to sell off assets to fund debt until vendors shut them off completely .
https://blog.searsholdings.com/eddie-lampert/transformation-update/
I'm complete dismayed at Eddie's explanation.
Vicious circle they are in. They have to close store because they are unprofitable to operate, yet when they close a store it cost money and now you don't have the sales from that store which makes cash flow that much harder. So you close more stores but that takes money which you now have less of because of lower sales from closing other stores, but by closing more stores you lose sales and spend more money on severance, and liquidation cost. So you have to close more stores, and so on. All the while the interest on the loans is still accruing and the vendors still want to get paid, and the light bill still needs to get paid, and you don't get as good of a discount on what you do buy because you aren't buying as much because you don't have as many stores to stock. Down the drain SHC goes
The company needs the upfront liquidator cash to pay other bills. Like plugging holes in a dam with your fingers. Won't buy you much time when all the other suppliers are nervous already.
The company is just going to look dramatically different than it does today.
Ever since I heard they were delaying the 400 million (100 million due within a few days) loan it pretty tells you they are going to holiday season to milk it as much as they can. For January 2018 when the big loan is due its possible they might actually close around their I would say.
I wouldn't try to connect too many dots. It's takes ,000s of manhours to prep a BK filing. It's either in proves or not. BKs are done at corporate level; store closings at Ops level.
the 500 mill was renegotiated for 100 mill due July 2017 and 400 mill pushed out to January 2018
I thought Eddie had deferred 400 million of that loan to January with possibility of extending for addition 6 months
I'm so glad my position was eliminated on June 13. Glad to be gone before it gets ugly. I feel for my former colleagues who are still at Sears.
The loan payment is $100 million. Also Sears Canada announced it was closing 59 stores right before declaring bankruptcy...
Those closures were probably necessary either way. Besides, announcing store closures won't make them any more able to make their $500 million loan payment.