Thread regarding Sears layoffs

yes thats why there was some value left in alexanders- sears as per their own balance sheet has a ton more liabilities v assets.

"In its filing with the bankruptcy court, Alexander's listed assets of $183.7 million and liabilities of $95.7 million. Bankruptcy experts say the value of Alexander's real estate insures that its banks, suppliers and even its shareholders are likely to recoup their losses in the long run."

remember guys- all the re left at sears will go to pay the debt and or the pension - and there is already a re company.... seritage. Sears when its does go bk will go for chapter 7 - there will be nohing left for shareholders. Even chapter 11 will see the stock trade otc at maybe 5 cents - no more.

4vet, I have asked a similar question, and have gotten an answer: Alexander's Inc. Filed for BK protection in 1992 and converted away from retail into a real estate company. It now trades many times higher than it ever did as a failing retailer.

For context, I tried to find sec filings prior to BK to see what their debt burden was. I cannot locate them, though I doubt the burden of debt is anything close to what sears has on their sheets right now.

Eddie's investment in SHLD is not that hard to figure out. His loans to them are drawing 6-8% interest and secured. He also bought the bond debt that again draws interest and in BK is paid back before stock holders. Any stock holder thinking that they will see some sort of windfall after BK is delusional. If you can name one retail stock that went BK and then traded at 90% of its historical high afterwords I will retract and apologize .

Back when I worked for them , in our cluster of 28 stores, there were a handful that were goldmines.

An untrained ape could have managed them.

And there were some that clawed and fought for every sale, put up with massive inventory shrinkage, and were placed in areas I wouldn't want my car breaking down in at noon on a Sunday.

The stores that survive in my area are the former group, and I would think those would be the ones that are cherry picked, because they sure don't show up on the list given to the Pension Guarantee trust as collateral.

A few more facts on the reinsurance situation. SHC never claimed the 125 stores transferred to Sears RE were the "best" or the "top" stores. This language was added later by outsiders promoting the hidden asset myth. It doesn't matter that Sears RE is registered in Bermuda. It's still part of the holding company and the assets show on the SHC financial reports. The bulk of the hidden asset myth relates to intercompany transactions shown in the footnotes to the annual report. Sears RE shows huge assets, but other divisions of the holding company have a corresponding liability. It's essentially money the company owes itself. There is nothing "real" there which would be available to shareholders in the event of SHC retail bankruptcy. There is some value in Sears RE, but it isn't the huge pot of gold some like to believe.

Remember that when the yptoy supplier cut off supplies they were advised to do so by retail credit specialists and by their banks.... Institutions who have far more insight into what's really going on and what assets Sears has- finally I suspect the 4th quarter earnings will show a $1 billion loss - psychologically that would be devastating.

O/p here - thanks for the comments- for the last two posters- when Sears Canada spilt thee was an opportunity to look into what the reinsurance business was as it would not longer reinsure Sears Canada- it revealed that it's a nothing business with no assets. It would not matter if it was a subsidiary all assets have to be declared on the balance sheet- finally on the 125 properties, there are few of those left - the pbgc has a number of them as a guarantee- Sears has been slowly selling off a handful at a time over the past couple of years and the rest are used as security for eddie's cash loans - so no pot of gold at the end of that rainbow I am afraid. HNY one and all

To the last poster - don't forget that the reinsurance subsidiary is headquartered in Bermuda. A foreign country where neither Sears or Kmart has a presence. And as for the thought of commercial real estate being worthless, where do most of you buy your groceries, household goods, prescriptions, etc. Online ? Not very likely. You get into your car and drive to Walmart, Kroger, Walgreens, Publix and the rest. 50 of the 64 Kmarts that just finished the liquidation a couple weeks ago were owned. And every single one of them was sold. While it is true in some areas there is too much commercial real estate and the value isn't as high as it used to be, someone is buying it. i agree with your point of not inciting the naysayers, who could very well be Lampert's puppets and instead keeping it in the public eye for the media to continue to research and report on.

Actions do speak louder than words. If SHLD stock will soon be worthless, then it is curious that Eddie Lampert continues to increase his share. The top 125 properties were deemed to be the most valuable of all and they were put into the subsidiary years before the 235 in the REIT. If they are not separate, why didn't he make the REIT 360 stores and include them ? Because they were already removed from Sears and in the sub, long before Land's End, the Hometown Stores, and the REIT. The sub has also issued securities of it's own and that is why it doesn't show up on the balance sheet of Sears Holdings. I don't know if it is worth 20 billion or not, but it could still have a lot of value in it. The CFO and other execs leaving means nothing as they won't be able to benefit from the bankruptcy if they don't own shares. They could be leaving to avoid the controversy they know will be coming when anything happens. And as two other posters mentioned, why is it whenever anyone mentions it, do a gang of people immediately come on and post how stupid they are ? Why do you care, if they are wrong, so be it. Eddie has been running the company with nothing but financial tricks for a decade now, yet people seem to believe that he can't hide assets. I didn't want to get into this discussion again as it seems to always flare up in various posts. The only reason that I am wading into it again is not for the posters here, but for Brian Sozzi, Haley Peterson, Seeking Alpha, Motley Fool and the others who regularly visit this site and have written about things leaked here. I just want them to keep an eye on Eddie and SHLD even after the coming bankruptcy and not let him slip away unnoticed.

to the o/p- great post - sears is dead, maybe eddie's financial future goes with him- no bailout no escape from a death spiral that HE created. EDDIE SHOULD BE IN JAIL.

To the poster saying only Eddie and the cfo know - well the so what respected cfo that Sears had resigned a few months ago as have some more senior management - that tells you a lot - you think they would leave if there was a miracle here...?

Closest Sears unit to here closed nearly 10 years ago . Mall that it was anchored to went for pennies on the dollar, and was eventually torn down.

The store that replaced it shuttered a few years back, as did all the Sears Hardwares around here.

I really don't get the logic behind anyone still clinging to the idea that this can be a real estate play. Commercial real estate is a losing proposition these days.

I think another salient point I read elsewhere that is Sears/Kmart claims to be a $20-25 Billion company. But they only (at the end of the 3rd quarter) had $5B in inventory. They may be able to generate non-product sales through home services and innovel, but they don't have the cash to buy, nor credit terms for, additional inventory to sell. They are facing a cliff in terms of sales. If they are not able to buy inventory, then 80%+ of their business goes away.

@L6H9yPy-qbw Your point is well taken. Knowing Eddie and his minion's history of trying to manipulate social media, it is curious that whenever someone even mentions the possibility of hidden value on this site, so many people jump in to denounce it. It makes me wonder how many of his goons are trolling this site. I prefer your approach. Let's just wait and see how it all plays out.

last poster- spot on the reinsurance is nothing but a myth - has been debunked. The only thing is how far is eddie willing to go to keep this thing alive- letters of credit/loans may buy them another year but at some point he only has around $1.8 billion if he went all in- sears will take that in a matter of months- what confuses people is does he have a last trick up his sleeve- i doubt it- but still he has 48% of seritage worth a cool $1.5 billion or so, his lending to the company is secured against real estate and inventory. I dont know how much he picked up kmart for out of bankruptcy but by the time all is done ex his salary he will have made around $3 billion from sears so not a bad gig. Wouldn't it be ironic if seritage started to lend money to sears...?

Retail Square Foot per Capita

US 46.6 square feet

India 2.0 square feet

Mexico 1.5 square feet

UK 23.0 square feet

Canada 13.0 square feet

Australia 6.5 square feet

The US is double the UK and 3.5x Canada. This means a major real estate glut is here made worse by the phenomenon of Online Shopping. Most of the closed stores will end up as churches, thrift stores or abandoned.

Sorry last poster, that's wrong. Their auditors may be directionally somewhat wrong, but that whole reinsurance nonsense has been debunked elsewhere. It. Does. Not. Exist. Auditors are not stupid and there are no treasure vaults Al Capone or otherwise. So is the inventory worth a full $5 billion? in a fire sale of course not. Is the real estate worth exactly what's on the books? of course not, but if the valuation is wrong, best case it's wrong by a billion and you have to believe in unicorns to even believe that. Value of KCD? Really doubtful it's north of $2.5 billion and as the OP points out, that all goes to the pension fund. They haven't even paid their property taxes this year yet, and they have historically done that much earlier than now. there is no happy ending to this story....

I would like to end the debate as well. The simple fact is that with all of Lampert's dirty dealings and financial tricks, no one really knows how much underlying value there is in SHLD. It may be worth nothing or the "reinsurance" subsidiary could be worth a lot. Many people want it to be worth nothing so Sears is screwed and a lot of people want it to be worth a lot so it will prove what a crook Lampert is. Only time is going to prove which is right. People on both sides feel strongly, but the simple fact is that unless you are Eddie, the CFO or someone else with intimate knowledge, no one knows. That is the way they want it to be.

yep good post - some clown on a thread below was suggesting sears would be bailed out.. ha ha yeah the gov will throw $10 billion to bail out sears and then another $2 billion a year to run as a loss making entity...

great post- finally some sense- eddie cannot close stores fast enough to stop the bleeding as that will hurt seritage so its catch 22- sears dies and he walks away with 48% of seritage where the real juice is.