The writing is on the wall. I call mid January.
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They will go through this holiday season, and right before the 4th quarter earnings or losses are out, they will declare Chapter 7. They have too much debt and Im surprised they made it this year with all the cost cutting they did, but it hasn't helped them one bit.
Chapter 13 is almost always for individuals only, not businesses. In chapter 7 you just liquidate and walk away. Chapter 11 is a reorganization.
SHC will be a total and complete chapter 7. They have too much debt to reorganize and try to pay any of the debt off. Eddie owns most of the debt through loans and other means. With chapter 7 all share holders and creditors are wiped out except...drum roll please...... those creditors who have a secured debt. Meaning only those whose loans or money has been secured by some asset i.e. inventory or real estate. And who would that be? Hum, let me see. Oh, that would be one Edward Lampert and ESL.
Loans backed by real estate and inventory at 11% interest at that.
Bankruptcy will be in late January or February after they liquidate the closing stores and get through the holiday season. They make money, pay Eddie his interest payment for the loans, file bankruptcy. Shareholders lose, Eddie claims the remaining inventory and real estate to pay off his loans.
Really, quite brilliant.
BK 7, 11 or 13?
4th quarter ends end of January
Thar ya go
"Real Estate: The good stuff is gone. Sure you can claim what's left its worth something, but someone has to actually buy it to turn it into cash."
That's the problem, yeah... retail real estate has been so overbuilt, and so many other large stores are struggling/closed too, there's a lot of other big empty spaces on the market.
@Q3Q0SdU-sbr Yeah sure...that's what they keep saying and still it hasn't worked. And it NEVER WILL. The more you cut away from your company, the LESS money you make in the long run. The saving of money is only extremely short term. Because then it puts pressure on the remaining stores to make up for the other closed ones. What, you expect all the stores to quadruple or more their sales?! HA!! Not happening, baby, no way.
Just a few more store closings and a few more asset sales away from a return to grandeur.
What whit the every store Kmart 40% off and Sears 50% off, does it point to a stealth liquidation. Only time will tell. I really hope Sears continues in some format.
Profitable because they have minimized expenses well beyond sustainability? Or properly stocked, properly staffed stores in good physical condition?
The sears company will still continue , the mall based stores will be cut down dramatically, there are ony 400 stores that are slotted as not profitable so look for more closings . Not a full BK , chapter 11 so Eddie will get his realestate, but the company will go on.
Home Services: As already stated, horrible reputation.
Kenmore: Synonymous with Sears and saddled with that stigma as well as the stigma of Sears home services.
Diehard: Oh, you mean that old Bruce Willis movie from like 100 years ago?
Amazon: Amazon isn't going to put a dime into anything from Sears. Its all old, decrepit, outdated, worn out, old tech. If Amazon wants a warehouse, they'll build a modern warehouse, not a 1950's warehouse. If Amazon wants showrooms, they aren't going to start with a roached out KMart in the seedy part of town or a behemoth Sears with 1960's architecture in that well-it-used-to-be-nice mall on the other side of town.
Real Estate: The good stuff is gone. Sure you can claim what's left its worth something, but someone has to actually buy it to turn it into cash.
It just depends what is their left for Sears? The more you know about the inside company the more it can guesstimate. How many assets are left and how many other big brands can Sears still burn (they already sold its biggest earlier Craftsman). Theirs a huge loan due on January and many other factors the collateral are running out. You know for a fact that when their is not enough to support the loan that Eddie gave hes pulling the plug. Thats the day hes done and wont loan a dime more.
This holiday season feels very different from many others I felt. Feels like they are cutting to the bone and aren't going to invest on its employees just whatever they can stretch since money is just getting so tight at this point.
Just because people have been saying BK is coming and it has not yet does not mean it won't. Even ex shld executives have said along with many experts that SHLD should have filed BK already. And with out Eddie and ESL loans it would have, no bank is willing to loan cash to SHLD. Its a pretty simple thing , you have to make a profit with out that you burn assets to stay afloat . Right now that burn rate is around 4 million a day. Do I hope we make it sure I do. Do I believe we will no I do not.
all the RealEstate of value is mortgaged or held as collateral for the pension shortfall
A couple more assets? Sears Holdings still owns over 350 of their properties. That's a ton of real estate.
To the OP: good luck on your short, don't be mad when bankruptcy eludes you... again.
home services business has dropped over 50% and is rated worse service in the US. They would be lucky to get 100M, not 6B
There are a couple more assets left to sell. These last few sales will truly make Sears an asset light company which was a stated goal. The Kenmore and Diehard names are still for sale. The home services business has value and is still for sale. It has been profitable for years. There are still some rabbits left in that hat. According to an article about 3 years ago Home services was valued at 3 billion dollars which is 6 times the current market cap of the whole company. There will be a big splash if Amazon were to decide to buy any or all those 3 of these assets. The stock could pop significantly and have cash to pay down debt and fund pension deficit. I would like to see this happen. Perhaps its a pipe dream. Amazon wants to employ their own home services and are already selling the Kenmore appliances on their site.
"People have been calling bankruptcy dates for years and nothing ever happens. We will keep on going, Eddie always finds a way to pull a rabbit out the hat."
LOL! Magical thinking based on their fear of losing their job and subsequently defaulting on their 6 year car loan and having their car repo'd.
People have been calling bankruptcy dates for years and nothing ever happens. We will keep on going, Eddie always finds a way to pull a rabbit out the hat.