Sears Gets New Line of Credit from the Company’s CEO
It is no secret that Sears has been struggling to stay in business. Sales continue to drop throughout the country, and the company has lost $9.35 billion over the last eight years. Eddie Lampert, the Chief Executive Officer for Sears Holdings Corp., is opening a $200 million line of credit to help the retailer get back on its feet.
Lampert is a hedge fund manager and a personal investor in Sears as a company. He and affiliates of his investment firm may offer as much as $500 million to Sears, depending on what the other lenders have to say. Industry experts say the company will need to raise a total of $1.5 billion to get through this year.
Lampert and his hedge fund own $1 billion of Sears’ debt and about half of the company’s shares. The retailer saw an 8.7% increase in the stock price immediately after the line of credit was announced, but that dropped to 3.9% by the end of the day. Over the last year, Sears has lost over 60% of its value.
The holiday season is usually a reviving time for retailers, but not so much for Sears.
“They weren’t able to generate a ton of cash out of it – if any,” said Noel Hebert, an analyst at Bloomberg.