ESL Offers Sears Vendors Added Protection

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.

According to a Sears Holdings spokeswoman, the company views this agreement as a vote of confidence by ESL and Lampert, who owned 62 percent of Sears Holdings' outstanding shares and $350 million of its outstanding debt at the end of 2011. "Obviously, we do not speak for ESL, but we see this as a sign of ESL's continued confidence in our company," the spokeswoman told HFN.

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.

HFN Staff | News & Commentary

HFN provides detailed information on the key home classifications: Housewares, Tabletop, Floor Covering & Rugs, Furniture, Home Textiles, Lighting, Home Decor, Mattresses & Bedding, Gifts, Major Appliances and Consumer Electronics as well as Business, Finance and Retail.


  • Patti Carpenter Talks Color and its Importance in the Home

    Camera Icon   More Videos

Subscribe to
HFN Omnichannel
Receive the news you need to know about the trends in the industry delivered right to your inbox.

Current Issue

  • HFN August 2017 cover


    August 2017

    COVER STORY: Sharpening the Focus on Millennials

    Find out what makes Millennials tick when it comes to home decorating, shopping and at-home entertaining with HFN's annual consumer study. Turns out, Millennials favor the in-store shopping experience.


    • Power of the People - Crowdfunding campaigns provide needed capital, feedback for home and housewares product launches.
    •  Omnichannel Retailing: Visual Search Takes Off - Learn how voice and visual search are revolutionizing product discovery.