It's not rational to keep the stores open, year after year, loss after loss.
He won't have a choice, they will be liquidated in Q1 2017 after the vendors stop shipping and SHC runs out of cash, but I just can't see a rational argument for keeping the stores open. Sears or Kmart.
(btw it's also not rational to work for SHC, but so many still do)...
Good luck, I wish you the best.
I'm vested been there 39 years!! Can't get pension untilvi go part time. Don't want to go part time and get 4 hours! Hoping to make it to July 17
How close are you to being "Vested" in the pension plan??? Hang in there.
Everyone is getting screwed including ones with seniority are being cut first.
This scares me. I am soooo close to being able to collect my pension (or at least half)
Yes, I agree I hope the stock tanks.
The stock price has been rising recently up to around $17.50... How much will poor results shave off that number....?
I would say the ink will be redder than the lipstick on a Saturday night h--ker.
I am looking forward to see how bad the red ink is.
the 2nd quarter results next week will show us how dire the situation has become or if any improvements have been made.
There are various ways that vendors can protect themselves when dealing with a retailer. Vendors can purchase insurance to protect themselves in the event of nonpayment. My understanding is that only one company still offers this type of insurance on shipments to Sears and the cost is extremely high. Some vendors self-insure, which means they can set aside enough money to absorb a potential loss. Other vendors may ship goods, but with onerous terms attached, such as no discounts, payment in very short order or even C.O.D.
In the world of business and finance there is no shortage of entities that are willing to take a calculated risk in order to make a profit. It is this dynamic that allows a dying company to stay on life support for quite some time.
You have a very valid point.
The big question is not the corporate level decisions but the vendors. I get how corporate wants to make this work. They want to keep their jobs, work their way up the ladder etc. Eddie and the hedge funds want to make money, employees and retail be damned it is about the share holders to them. Those share holders happen to be eddie and the hedge funds in this case.
But I wonder about the vendors. How can they extend credit to a company that could close shop any minute or at least within the next few months depending on how the REIT and debt was structured? Someone who is in the know needs to let us know what the long term plan is so that people, whose lively hoods and families depend on their jobs can make an informed decision.
Sears can close any of its REIT stores by paying one years rent effective July 1, 2016
The devil is in the details of store leases. Kmart, for example, has a myriad of leases from many decades ago. Some store leases require a full retail operation for the duration of the lease. Some leases include a payment of a percentage of store gross sales, in exchange for extremely low rent. Some leases are such sweet deals that running a very low volume store in a location is actually profitable for the company.
In terms of deciding which stores get closed first, there are many variables besides negative EBITA, but those lease details weigh do weigh heavily in many cases.
I am in agreement with most of the points made about Sears Holdings executives. However, they may all fare better than you'd think. There's a lot of changes being made to garner better profitability. There is definitely forward thinking going on, despite what may or may not be going on in management at the store level.
Your right, you hit the nail on the head.
I think the other previous posters had it right. The REIT and pension obligates that the stores stay open until at least mid-2017. And if the company went into liquidation now it would look as though Eddie stripped the company of assets to hide them from creditors. I do think working for SHC can still provide meaningful career development, as the company still continues to do a lot with technology etc, even if it doesn't play out as planned at the store level. I think the employees who will get burned in this are the upper level executives who will have their careers stained by presiding over the failure of this organization. Mid-level and low level employees arn't responsible for this mess, and can use what they learned amd accomplished at SHC to move foreward in their professional lives. Working in a struggling organization puts challenges on employees that are not seen in normal organizations, and overcoming them forces personal growth. I.e. Running a gigantic store with only a skeleton staff and no sm or asms. Bringing this experience to other enterprises will hopefully make those other businesses stronger.