Sears Holding Corporation’s subsidiaries have secured a 15-month, $500 million loan, designed to give the company financial flexibility as it transforms itself into a more asset-light, integrated retailer. An initial $250 million was funded under the Loan Facility, while the additional $250 million is expected to be drawn by the subsidiaries in the future. Sears also has closed a previously announced $750 million Term Loan to help with its e-Commerce and omnichannel initiatives.
As the retailer’s brick-and-mortar stores continue to suffer, Sears Holdings plans to focus on its omnichannel Shop Your Way program, a social shopping platform that offers members rewards when shopping at Sears, Kmart and other retail partners. Sears Holding has already announced the closings of 68 Kmart and 10 Sears stores to take place this summer, and the retailer hopes the Shop Your Way program will aid in its turnaround.
“We have an asset rich portfolio which provides us with numerous options to finance our transformation strategy,” said Robert A. Schriesheim, Executive VP and CFO of Sears Holdings in a statement. “The expected closing of the previously announced $750 million Term Loan, together with this $500 million facility, provides $1.25 billion of committed financing. When considered together with our previously announced intention to monetize at least $300 million of assets, this set of actions would result in an aggregate of $1.5 billion of enhanced liquidity. As we have consistently demonstrated, we will continue to take actions to adjust our capital structure and manage our business to enable us to execute on our transformation while meeting all of our financial obligations.”