Is $500 million the magic number for Sears?
Or is it just the latest in a string of failed attempts to turn the struggling retailer around?
It’s no secret that Sears has been in the weeds, so to speak, for some time now. Yet, in the scrappy tradition of so many great American brands, the company continues to find a way to hold things together. This may be its last chance for a turnaround, as it’s one that would come with a $500 million price tag. The retailer has its fingers crossed that this latest loan does the trick.
As The New York Times reported, Sears has secured a $500 million loan that it hopes to use to fund a transformation that includes a reduction in the number of company-owned stores it operates throughout the U.S. This is just the latest chapter in an ongoing saga that saw Sears spinoff 254 of its Kmart and Sears brand stores this past June.
In the past five years, as shoppers have moved away from the mall and toward online and connected digital shopping experiences, Sears has experienced heavy losses totaling $8 billion overall.
ESL Investments, a firm founded by Edward Lampert, who also owns a controlling share of Sears, contributed $125 million of the initial $250 million investment that is being described as a 15-month loan, according to NYT. Sears has reportedly used 13 of its properties as collateral. This latest loan is in addition to $750 million that Sears obtained in March.
The retailer is no doubt hoping it’s the infusion of capital the brand needs to finally start seeing a turnaround.