Sears has to pay $134 million of debt, which is due on coming Monday
Sears has been encountering substantial obstacles to report profitability for many years, hurt by the enormous changes in the retail environment caused by the increasing trend of online shopping. To overcome the challenges, Sears has closed unprofitable stores, liquidated inventory, and reduced headcount.
The company has been selling properties where it can obtain favorable prices and repaying the associated debt. Sears has also been seeking partners who can expand the reach of its major brand assets and reducing costs.
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Apart from these headwinds, the company has been impacted by its long-term pension obligations. The retailer has contributed nearly $2 billion in last five years and over $4.5 billion since 2005 to fund pension plans. Last month, Sears received a proposal from ESL Investments regarding certain liability management and real estate transactions.
The Hoffman Estates, Illinois-based firm has to pay $134 million of debt, which is due on coming Monday. The company has been not successful in reaching a deal with its CEO Eddie Lampert, who is also its biggest stakeholder to restructure its debts and sell assets. It is expected that Sears will not be able to pay the debt on the due date.
Sears stock, which hit a new yearly low on Tuesday, had lost 83% so far this year and 92% in the past 12 months. The stock continued to bleed in the morning trading session.