The Ghost of Sears’ Future
What Lampert has chosen to do is leverage the company with debt to buy it time, but at some point, the weight will become too heavy. Some 51, retirees will receive their full pension benefits from the insurance company rather than from Sears. Vince Power, a spokesperson for Sears Canada, said Wednesday morning that operations in Canada are separate from the U. My Star location Select Location. HBC said it is cutting about 2, jobs across North America in an effort to help it compete in an increasingly tough retail environment, partly due to the rise of e-commerce.
This copy is for your personal non-commercial use only. Millions of dollars have been funnelled through the hedge fund of chairman and CEO Edward Lampert to keep Sears afloat but with sales fading, it is burning through cash. Lampert combined Sears and Kmart in , about two years after he helped bring Kmart out of bankruptcy.
Vince Power, a spokesperson for Sears Canada, said Wednesday morning that operations in Canada are separate from the U. Sears Canada is expected to release fourth quarter and annual results in April. Sears Canada is in the midst of launching a new off-price initiative, featuring discount-priced designer brands in apparel and homewares, within existing stores and online, called The Cut at Sears.
The company employs more than 16, Canadians, operating corporate stores and 69 Hometown stores nationwide. Other companies such as J. Instead, various state agencies now oversee it. There is a good argument to be made that retirees who were switched over to MetLife are better off than those remaining at Sears since the insurer is a far healthier institution than is the retailer. Yet Sears is still effectively kicking its remaining pension plan can down the road for several years, during which time it will be selling off or further leveraging properties that are the assets financing the pension plan.
Although it has, indeed, given itself some breathing room, all of those problems will come back with a vengeance when the time clock expires. Because its business is not improving but rather deteriorating more rapidly, assuming Sears is even around in two years, it will have to resort to further financial gymnastics to put out the new brush fires that will flare up. The retailer is taking out ever more loans to juggle its payments, but the fuse on its pension obligations is still burning as Sears runs out of both customers and cash.
What Lampert has chosen to do is leverage the company with debt to buy it time, but at some point, the weight will become too heavy. When it collapses, it will be the retirees who are standing in the rubble. More From The Motley Fool. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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