Sears Holdings Corp (NASDAQ:SHLD) Expects REIT Transaction To Be Completed By June


Sears Holdings Corp (NASDAQ:SHLD) chose a public platform to reconfirm that its proposed fund-raising plans via REIT will be completed by June. The Chief Financial Officer of the retailing-chain, Robert Schreisheim, in an official blog post, chose to lay-bare the reasons behind some of Sears Holdings Corp’s actions.

The Sears Holdings Corp. CFO was articulate in pointing out that the recent Wall Street Journal news report of Sears Holdings Corp pre-paying its vendors as a signal of risks was misplaced.

WSJ had posted that Sears is paying its vendors early, and its cash is being tied-up, increasing risks in running routine business. The journal had also argued that a ‘dismal holiday season has rattled vendors,‘ and Sears Holdings Corp. appears to have no choice but to pay early!

Sears Holdings Corp (NASDAQ:SHLD) had lately taken to paying some of its vendors within 15 days, against standard practice of a 60-day paying window.

CFO Schreisheim claims that the early payment to vendors is a means of minimizing outstanding-debts and also gaining 3% to 5% discounts in the process.  In his blog post, responding to the news report, the CFO explained that the company’s early payment was aimed at lowering its exposure and gaining discounts from vendors.

Additionally, he claimed that Sears Holdings Corp (NASDAQ:SHLD) was merely paying off debt, just as any family would first pay-off credit card bills.

He also noted that Sears Holdings Corp will continue to complete its November-announced, Real Estate Investment Trust purchase of 200 or 300 store locations by June 1, 2015.  The top-executive reiterated that this moved would fetch the company $2.0 billion, allowing better ‘financial stability.’

Sears Holdings Corp shareholders are trusting the REIT to bring back momentum based on its strong liquidity positioning.

Sears Holdings Corp (NASDAQ:SHLD)’s CFO reiterated, in the blog post, that the company has never defaulted on its payments to the nearly 50,000 vendors partnering it. More importantly, never had any insurance been claimed against non-payment, by its vendors.

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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