Once again, Eddie Lampert, CEO of Sears, is opening up his own wallet to give the struggling retailers a $200 million boost.
According to Bloomberg, Lampert has offered the company a $200 million letter of credit through affiliates of his firm, ESL Investments. The move may help to keep soothe the concerns of vendors after the retailer’s uncertain holiday shopping season.
A statement released on Thursday (Dec. 29) confirmed that the loan amount could expand to nearly $500 million if lenders consent.
Despite the fact that Sears has lost more than $9 billion over past eight years, Lampert’s latest move shows his commitment to keeping the retailer afloat.
“The only person lending here is Eddie,” Noel Hebert, an analyst at Bloomberg Intelligence, explained. Hebert identified Lampert’s decision to once again bail out Sears as not being a “normal course” of action.
Lampert’s firm also provided a $200 million unsecured line of credit to Seritage Growth Properties, a real estate investment company that spun off from Sears last year.
In Q2, Sears’ revenue fell 8.8 percent to $5.66 billion, and same-store sales were down 7 percent at Sears stores and 3.3 percent at Kmart. At the time, Lambert noted that Sears faced “a challenging competitive environment.”
Sears’ losses in Q2 rose to $395 million, or $3.70 a share. Profit was $208 million ($1.84 per share).
“I suspect the quarter from Sears will be so bad that people will voice concern on the company getting the inventory it needs to drive its business during the holiday season,” Brian Sozzi at TheStreet wrote in August. “And if it doesn’t have the inventory during the most important quarter of the year, look for the market to reason the company could be headed for a financial tailspin sometime in 2017.”