It’s been a rough time for Sears.
From its 8.8 percent revenue tumble in its Q2 earnings to the recent announcement sharing it is closing an additional eight of its namesake stores, the big box retailer seems to be struggling to survive.
In an effort to turn itself around, news has broken of Sears Holdings borrowing money to stay afloat.
Back in March, PYMNTS reported on Sears’ status in the retail realm and shared the department store had already borrowed $800 million from ESL Investments, a hedge fund founded and owned by the company’s current chief executive officer, Eddie Lampert.
Now it looks as though Sears is turning to that familiar hedge fund for another line of credit. ESL Investments has agreed to extend an additional $200 million to Sears Holdings with a 9.75 percent fixed interest rate per year.
Sears Holdings’ chief financial officer, Rob Riecker, reflected on this new injection of funds from his hedge fund.
“This facility is intended to provide the company with the flexibility to generate additional liquidity on an as-needed basis,” Riecker said. “This adjustment to our capital structure demonstrates that Sears Holdings will continue to take actions to generate liquidity and manage our business while meeting all of our financial obligations.”
Department stores have faced steep competition from the eCommerce arena. Given the rocky ups and downs of the past few years for the retail industry overall, consumers’ changing shopping preferences and Sears’ continual need for financial assistance, it’s likely we’ll continue to see the retailer go through a transformative period.