ESL Offers Sears Vendors Added Protection
March 19, 2012,
HOFFMAN ESTATES, Ill.-ESL Investments, the hedge fund operated by Sears Holdings Chairman Edward S. Lampert, which is the retail holding company's top shareholder, has moved to ensure that vendors would continue to provide merchandise to Sears and Kmart stores in the event of a bankruptcy filing.
According to Sears Holdings' 10-K filing last week, ESL has entered into an agreement with an unnamed financial institution in which the financial institution would purchase vendors' accounts receivables from the sale of goods or services to Sears Holdings, in the event that Sears Holdings files for bankruptcy. This agreement covers vendors that had entered into trade-receivable put agreements (which help safeguard vendors' receivables in the event of a bankruptcy) with Sears Holdings, the filing said. In addition, ESL may choose to purchase an 80 percent interest in the rights and obligations arising under future trade-receivable put agreements the financial institution enters into with Sears Holdings' vendors.
The filing also said that, in addition to the 100 to 120 Sears and Kmart stores the company plans to close this year, the company will also close 43 Sears Hometown stores, 10 Sears Hardware stores and nine The Great Indoors stores. Sears Holdings had announced that it would exit The Great Indoors format three weeks ago.
Other Articles By Author
Adriana Hoyos Relaunches Brand at High Point Market
HFN's DIGITAL EDITION
2017 State of the Industry Report
Cautious Optimism, Mixed Results
Many expected 2016 would be a banner year, but the political and economic climate softened consumer confidence. It was also a year consumers spent more lavishly on home remodeling rather than decorating.
ALSO IN THIS ISSUE:
- TJX Unveils First U.S. Homesense Store - In a time when retailers are reducing store counts, TJX continues to get physical.
- Ikea’s Fluid Spaces - The retailer’s new intros reflect multifunctional rooms.
- N.Y. Home Fashions Market Preview - Textile textures get soft and cozy, colors warmer.