Sears is in the midst of a long-winded downfall from its once mighty retail status. The financial losses, of course, are bad for the corporation. But now Sears suppliers are pushing back at the company over fear of late payments, and Sears is struggling to calm those fears.
Sears’ annual losses have increased to $1.7 billion in 2014, up from the $1.4 billion loss seen in 2013. According to a report from MarketWatch, unnamed sources say Sears’ suppliers have become more conservative about shipping products to the retailer because of those numbers.
The corporation is attempting to calm those fears by shortening payment terms with its suppliers to just 15 days, though is asking for an early payment discount from those vendors of between 3 and 5 percent, reports said. According to MarketWatch, Sears is usually on a 60-day payment term with its suppliers.
While Sears did not elaborate on the matter to reporters, a spokesperson for the company said Sears is meeting all of its payment obligations with supplier partners.
Sears’ alleged promise to speed up payments to its suppliers is a stark contrast to another struggling retailer, Target. The corporations’ Canadian operations have faltered and, as a result, Canadian suppliers claim that Target has failed to settle outstanding invoices.
Some suppliers have taken Target to court over these allegations, and legal proceedings have also led to claims that Target suspiciously switched some of its U.S. invoices to its Canadian headquarters, perhaps knowing that the Canadian enterprise would soon falter and not have to pay those bills.
The saga, reports said, could be a warning to all small suppliers doing business with major corporations to update their sales technologies and tools and take advantage of new innovation that facilitates cash flow management, supply chain financing, and digital invoice settlement.