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Retail rumor: Is this major department store about to go bankrupt?


Mike Timmermann

The holiday shopping season is the most important time of the year for retailers, and this year, one iconic department store may be fighting just to survive.

Report: Suppliers fear Sears will go bankrupt

According to a Business Insider report, at least a handful of suppliers have significantly reduced shipments to Sears because they’re worried that the company won’t be able to pay its bills for much longer, and those fears have increased over the past year.

Sears and Kmart, both owned by Sears Holdings, have closed dozens of stores this year in order to concentrate on the company’s “best stores, best members and best categories.”

In August, Sears reported a 7% drop in domestic same-store sales and Kmart reported a 3.3% decline.

“We continue to face a challenging competitive environment and while we continue to focus on our overall profitability, including managing expenses, we reported a net loss for the second quarter,” Sears chairman and CEO Edward Lampert said at the time.

So in addition to a reduced store footprint, fewer shipments would likely mean less inventory for shoppers to choose from during the Christmas shopping season, which would be the perfect time for a struggling retailer to win back customers.

Despite this new report, Sears and Kmart will both be open on Thanksgiving to give shoppers an early start on their Black Friday shopping.

But as we head into 2017, there’s speculation that Sears could file bankruptcy, eventually leading to a liquidation. Sears is one of seven retailers that Fitch Ratings, one of the preeminent credit rating agencies, believes could go bust in 2017 or 2018.

The company has said it remains committed to the turnaround strategies in place for both Sears and Kmart.

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