Thread regarding Sears layoffs

Had a few local vendors come in today to try to get their merchandise and were told they could not. One was an older gentleman who was in tears because the check SHC sent him the week before BK was recalled (whatever that is) and he was told they were not paying his bill. He is a local contractor that did work to fix our store. He said he is owed money and this might BK his company

Asw, it hasn't been "simply business" for years. Stop lying, or get into politics. That's the only place blatant lies are acceptable.

@was Sounds good until you realize that most of that stuff is slow to sell. Margins don't matter if that stuff isn't selling. We still have over 90 unopened boxes of soap from two years ago sitting in one of the stockrooms. We've got etageres of soap at both softlines cash wraps, in our home department, in appliances and even in tools. We've got purses, lots of purses. They do sell a little better but they send us way more than we need, so, we have way more purses than we have space or fixturing. The purses are crammed in because everything has to be on the floor. The only reasons why we were allowed to have 90 boxes of soap in a stockroom was because even the district manager agreed that it was unreasonable to have 90 boxes worth of soap out on the floor (at 24 per box), but I'm sure there will be a point in time that we will be allowed to back stock purses.

I remember when they were bringing in weird c-ap like hotdog toasters and beer making kits during fourth quarter. People still didn't bother buying any of it even when the holidays were long over and all that stuff was marked down to practically nothing. The majority of whatever came was sent off as MRN and the sad thing was it all came back the very next year. Lots of the same old clothes, usually Laura Scott or Metaphor, same thing. Get a ton of it in, it sells poorly, it starts to go on markdown, it still sells poorly, it gets pulled off the floor and sent back to the DC, only for the same or similar things to come boomeranging right back on our freight a few months later.

@asw - Back in the day at Sears the hardline managers would taunt the softline managers with the phrase, "Tiny tickets." The softline mangers would always respond, "Tiny tickets, but big profits!"

The margin on those soaps and bras are higher than the appliances. It is simple business as usual.

http://www.chicagotribune.com/business/ct-biz-sears-bankruptcy-turnaround-financing-20181019-story.html

Fast-dwindling cash is casting doubt on whether Sears Holdings Corp. can firm up its survival plan in time to avoid liquidation.

Sears is expected to bleed $220 million in just the first month of its bankruptcy, court filings show, cutting deep into the $300 million loan it secured this week from senior lenders. The crunch could become more acute if Sears doesn't get an additional $300 million it's counting on from Chairman Edward Lampert to keep operating beyond the next 15 days.

The retailer is staking its turnaround on getting a $112 million loan from Lampert's ESL Investments hedge fund by Nov. 3, according to a budget approved by the court, and another $188 million over the following two months. The new funds, Sears said in court papers, "will not be required for the Debtors to operate during the first two weeks of these cases, but will become necessary thereafter."

Key terms still need to be worked out with other stakeholders. Friction could develop over issues such as what assets Lampert would get as collateral, whether he gets to be the lead bidder to buy some Sears stores, and what concessions creditors will make — if any — to settle their claims against him. Representatives for Sears and ESL Investments declined to comment on the cash burn or the negotiations.

Sears's historical cash needs suggest the existing $300 million in financing won't last long, said Steve Goldberg, president of the New York-based retail consultancy The Grayson Co. "It's not a lot, considering their obligations with paying vendors, not to mention staffing and other operational costs," Goldberg said.

By comparison, Toys R Us borrowed around $1 billion when it filed bankruptcy, and it still burned through that cash too fast to survive. The experience left creditors and vendors wary.

"There is no such thing anymore as too big to fail. We learned that with Toys," said Kenneth Rosen, chairman of the bankruptcy and creditors' rights practice at Lowenstein Sandler in New York. His firm represented some vendors that were creditors to Toys R Us.

While Sears could have used a larger loan, it's a tough sell to lenders who are skeptical of the chain's staying power, given the company's long decline.

"The big issue today compared to a couple of years ago is that the consumer doesn't need them," said Goldberg, who has worked for Allied Stores and American Express. "There's nothing that the consumer can get at a Sears or Kmart that they can't get at Walmart or Target or some other retailer."

For his part, Lampert says he believes Sears has a future "as a smaller, less indebted retailer," according to a statement on the day the bankruptcy was filed by the Hoffman Estates-based company. "We intend to work closely and collaboratively with other stakeholders to restructure the company's balance sheet using the Chapter 11 framework as quickly and efficiently as possible," Lampert wrote.

The Toys R Us comparison is top of mind for stakeholders concerned they'll end up on the wrong side of a sudden liquidation. That includes vendors and landlords, who may run out of patience as Sears works on its rescue plan. That would make any turnaround tougher, according to Goldberg. "It becomes a bit of a self-fulfilling prophecy; if they can't get fresh inventories, it just exacerbates it even further," he said.

The prospect could make some stakeholders reluctant to go along with the recovery plan even if Lampert does come through with more money, Rosen said. "If they're losing $220 million a month, the question is, how long can they continue before the bondholders and the bank say, 'Shut this thing down'?"

Bloomberg's Josh Saul and Steven Church contributed.

@ouc - I used to sell appliances. That was a year ago. Left for the precise reason of not being able to order anything or not having anything beyond the cheap, low end c-ap in stock to sell. Got tired of walking sales out the door and grew irritated with the upper management blowing all their $$ on fru-fru c-ap like a zillion of those hand soaps and multiple huge bins of those tacky Christmas socks instead of spending their merchandising budgets on their actual bread and butter, which would be Brand Central hardlines. Cheap microwaves, cheap pillows that would make pillows from Walmart seem luxurious, toys and nic-nacs that nobody bothered to buy, a hulking huge pallet of water smack dab in the main aisle. Anything else I'm forgetting? You bet. The merchandisers turned Sears into a dollar store wannabe, albeit very poorly executed.

They blew the money on things that they couldn't sell, and shouldn't have been stocked in a Sears store in the first place, and now things are coming full circle.

@lmu - Do you have facts that contradict those statements? Curious to see it!

We got a truck Thursday and Friday

However, appliances can’t order anything for the customer

We have enough bras and socks already!! Stop the nonsense

Do you have facts for your statement? Curious to see it