Edward Lampert, chairman of Sears Holdings Corp. and its top shareholder, ESL Investments, have found a way to guarantee shipments by vendors to Sears and Kmart units, even as apparel is being pulled from a small number of Sears stores.
The company said in its annual report, or Form 10-K, filed with the Securities and Exchange Commission on Wednesday, that ESL inked a deal with a financial institution on Jan. 26 to acquire from the unnamed firm a participating interest in certain rights and obligations under “trade receivable put agreements.”
Essentially the rights generally don’t spring until Sears has filed for bankruptcy, after which the financial institution will buy the vendors’ accounts receivable for goods or services sold to Sears. ESL in turn may choose to purchase an 80 percent participating interest in the rights arising under future trade receivable put agreements. The deal is strictly between ESL and the financial institution. The regulatory filing said that, as of Jan. 28, ESL holds participating interests totaling $93.3 million.
Sears is not a party to any of the agreements. The retailer is the beneficiary of the agreements as they guarantee payment to vendors should the company file for bankruptcy.
A spokesman for Sears said, “Obviously, we do not speak for ESL, but we see this as a sign of ESL’s continued confidence in our company.”
ESL and Lampert together hold a 62 percent stake in Sears’ equity. The two also own $350 million of the retailer’s outstanding debt for fiscal year 2011 ended Jan. 28.
Sears since January has been plagued by factoring issues for trade receivables. Many of those orders pertain to apparel, which comprises a smaller slice of the retailer’s merchandise offerings when compared with its hardlines inventory.
Separately, the spokesman said a small number of Sears stores are reallocating floor space to better meet the needs of local shoppers. “Additional details on those categories will be available as we get closer to the transition, but we can confirm at this time that a larger array of mattresses and recliners are among the more popular items being offered. Sears clothing and related categories will still be offered to local customers on sears.com, with previews of our top fashion brands and trends from around the world found at searsstyle.com,” he said.
A credit analyst, who noted that the number of stores slated to lose apparel is under one dozen sites, called the move “no big deal.”
Sears said in December it planned to close between 100 and 120 Kmart and Sears full-line stores, or roughly 5 percent of its 2,200 full-line store sites.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)