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Home / Business / Sears says it has secured a $ 250 million lifeline, will close 96 stores

Sears says it has secured a $ 250 million lifeline, will close 96 stores



By Mike Spector and Jessica DiNapoli

NEW YORK (Reuters) ̵

1; Sears told Reuters on Thursday it had won a $ 250 million (£ 195.05 million) lifeline from lenders including billionaire owner Eddie Lampert, and will close more stores, which are increasing losses to the beleaguered US department store economy.

The new loan, put together in recent weeks, increases by about $ 100 million to the $ 150 million funding that Sears raised several weeks ago, say people familiar with the transaction, who were not authorized to discuss any aspects of the agreement publicly.

Through its hedge fund, ESL Investments Inc, Lampert has contributed a significant portion of the new funding, people added.

The financing and further closures of the store reflect continuing difficulties Lampert has had in his attempt to return Sears to his heyday, as it was among the largest retailers and owned the world's tallest building.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Lampert combined Sears and rival chain Kmart more than 15 years ago, heralding the formation of a retailer with $ 55 billion in annual sales, but the company lost money almost every year over the past decade in the face of competition from the likes of e-commerce giant Amazon.com Inc . " data-reactid = "36"> Lampert combined Sears and rival Kmart more than 15 years ago, and fortified the formation of a $ 55 billion retailer in annual sales, but the company lost money almost every year for the past decade competition from the e-commerce giant. Amazon.com Inc. .

As of December, Sears will close 96 stores and leave the dealership with 182 locations, a statement said. This is down from 425 stores Lampert bought when he saved Sears from bankruptcy in a $ 5.2 billion deal earlier this year.

Sears recently concluded an agreement to buy the affiliate company Sears Hometown and around 414 of the stores selling lawn furniture and appliances. Following the planned closures, the combined reseller will have about 600 locations. Sears also owns Kmart low-end stores, 45 of which will be shuttered during the December closing, said one of the people.

Sears said that the owners have "worked hard to position … to successfully focus on competitive forces and crop operations that have struggled due to increased competition and other factors."

Lampert contributed less than half the total amount of the new Sears funding, the people said. Re hedge fund Cyrus Capital Partners LP is among the other lenders, Reuters has previously reported.

Sears is in the midst of an attempted turnaround after filing for bankruptcy protection in October 2018 after losing billions of dollars. Lampert, formerly the company's chairman and CEO, has been bankrolling the dealership for years to keep it going, but so far failed to bring it back to profitability.

In addition to fewer buyers, Sears remains closely involved in litigation with the old bankruptcy estate over terms related to the earlier rescue of Limpertsberg.

These challenges have drained the company's cash and risked a potential breach of the terms of its other bank debt, the people said. That left Sears facing the choice to raise extra money or potentially close even more stores, they said.

(Reporting by Mike Spector and Jessica DiNapoli in New York, Editing by Rosalba & # 39; Brien)


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