Sears Holdings CEO and Chairman Eddie Lampert has gifted his company with an early holiday present. Affiliates of Lampert’s hedge fund, ESL Investments, loaned Sears $100 million in cash, according to an SEC filing.
ESL Investments will pledge up to $100 million more to Sears by Dec. 1 as long as the retailer proves it has the property collateral to secure the loan. Any new loans under the agreement are due April 3, 2018, and carry an 11% interest rate.
The new loans are part of a $500 million credit facility backed by the mortgages on 61 of Sears’ properties. Sears had initially borrowed the entire $500 million, but the company eventually repaid nearly $100 million by selling off some of its real estate, the filing said.
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Lampert and his hedge fund have a history of opening their wallets to help the struggling retailer prior to the initial $500 million credit loan in January 2017. ESL Investments loaned Sears approximately $800 million throughout 2015 and 2016 to keep the business in operation, an ongoing signal that the company has been in dire need of financial stability.
In its most recent quarter, Sears saw same-store sales at Sears and Kmart dip 11.5%, well beyond the expected 7.1% decline. But that it is only a glimpse of the struggles Sears has endured, with the company continuing to flirt with bankruptcy and anticipated to close nearly 360 stores in 2017.
Sears, which hasn’t turned an annual profit since 2010, has implemented a restructuring program, thus far cutting approximately $1.25 billion in costs related to organizational structure, store closures and category reduction. The retailer sold off its Craftsman brand to Black and Decker for $900 million in January 2017 in yet another example of its desperation for cash.
