Sears borrowed $100 million more from CEO Edward Lampert’s investment companies and may get an even bigger loan through a new agreement, according to a document filed with the Securities and Exchange Commission.
The loan agreement gave Sears an initial $100 million Jan. 4, with provisions for Sears to potentially borrow another $200 million from Lamperts’ companies, the document says. Lampert had already loaned Sears, which has struggled for years to turn a profit, hundreds of millions of dollars.
“We made significant progress in 2017 through our efforts to reset our cost base and enhance our liquidity …,” Lampert says in a Jan. 10 statement. “The financial transactions we are pursuing and incremental cost actions are designed 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.”
Sears is continuing to cut costs, including by closing retail stores, and plans to pursue further liquidity, the company says. Recently, the retailer announced that it would be closing 103 stores by early April.
“As previously announced, we are actively pursuing transactions to adjust our capital structure in order to generate liquidity and increase our financial flexibility,” chief financial officer Bob Riecker says in the company statement. “The new capital we have secured represents meaningful progress towards those objectives and demonstrates that we continue to have options to finance our business.”