Sears Raises $100 Mln in New Funding, Sees Smaller Fourth Quarter Loss

Sears Raises $100 Mln in New Funding, Sees Smaller Fourth Quarter Loss

Sears, like a lot of distressed retailers, needed a good holiday season.

Sales at Sears and Kmart stores plunged during November and December. Those stores combined for about $850 million in sales over the past 12 months but were among the retailer's worst performers.

He added the just announced financial transactions and cost cuts it's pursuing "are created to accelerate our return to profitability and enable Sears Holdings to increase our investment in the most promising opportunities in our enterprise, including our Shop Your Way network and our Sears Home Services business". Adjusting to account for fewer pharmacies and a smaller electronics assortment, same-store sales were off 14% to 15%.

The company's bleak holiday season was an outlier.

The additional $200 million Sears wants to raise may be secured against the same collateral, under certain circumstances and with consent of the lender, it said. But it's still losing money, and borrowing heavily. The company said it's also moving toward $200 million in cost savings not connected to store savings. Sears added that it had changed the advance rate for inventory under its second lien notes (to 75% from 65%) and is working on an agreement to improve terms in its $1 billion non-first lien debt.

Just last week, Sears announced another round of store closures, which the company said were some of its "lowest performing" locations.

Shares of the company, whose going-concern warning epitomized the troubles of America's biggest traditional retailers, tumbled more than 60 percent in 2017.

While reiterating his belief that the department store has the right strategy to turn Sears around, Chief Executive Officer Eddie Lampert said should the refinancing "not be fully successful, the Company's Board will consider all other options to maximize the value of Sears Holdings' assets". It has racked up $10.4 billion in losses since 2010, its last profitable year.

"(W) e expect a net loss attributable to Sears Holdings' shareholders of between $320 million and $200 million in the fourth quarter of 2017, compared to a net loss attributable to Sears Holdings' shareholders of $607 million in the prior year fourth quarter", according to the statement.

Sears (SHLD) closed hundreds of stores a year ago, leaving it with just over 1,100.

The latest moves are on top of new plans to close 103 Sears and Kmart stores this spring.

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