General Discussion

Javaman

(62,530 posts) Thu Jan 12, 2012, 10:23 AM Jan 2012

Sears Supplier Loans Are Said to Be Halted by CIT Starting Today

http://www.bloomberg.com/news/2012-01-12/sears-supplier-loans-halted-by-cit.html

Sears Holdings Corp. (SHLD) declined after two people familiar with the situation said suppliers will no longer be able to get loans from CIT (CIT) Group Inc. for their shipments to the retailer.

Sears fell 9.7 percent to $29.71 at 7:46 a.m. in New York. The shares dropped 56 percent last year.

CIT, the largest U.S. company that provides what’s known as factoring, told clients it would no longer approve credit for orders starting today, according to the people, who declined to be identified because the information isn’t public.

One risk when a factoring company pulls credit to suppliers is that others may follow suit. Hoffman Estates, Illinois-based Sears has enough liquidity that it will weather the situation, said Matthew McGinley, managing director at International Strategy & Investment Group in New York.

more at link...
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This is not a good sign.

7 replies

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Highlight:

Sears Supplier Loans Are Said to Be Halted by CIT Starting Today (Original Post) Javaman Jan 2012 OP

Sears has been in trouble for years WI_DEM Jan 2012 #1

And they are being run by Eddie Lampert, vulture capitalist.... rfranklin Jan 2012 #2

Raped by a pencil job. lonestarnot Jan 2012 #6

Sears is OWNED by K-Mart FreakinDJ Jan 2012 #3

They are thinking that Sears will not be able to pay the manufacturers. Bolo Boffin Jan 2012 #4

Poor old Sears and all of its workers. lonestarnot Jan 2012 #5

Sears credit cards Old Codger Jan 2012 #7

WI_DEM

(33,497 posts)

1. Sears has been in trouble for years

Reply to Javaman (Original post)

Thu Jan 12, 2012, 10:24 AM

Jan 2012

and they also recently announced they were closing several stores.

rfranklin

(13,200 posts)

2. And they are being run by Eddie Lampert, vulture capitalist....

Reply to WI_DEM (Reply #1)

Thu Jan 12, 2012, 10:44 AM

Jan 2012

Net worth: $3 billion
Chairman of ESL Investments thanked investors for patience and trust as shares of Sears, a major investment, dropped (20% over last 12 months). Meanwhile investments in AutoZone and AutoNation continue to rally. Lampert is a lawyer's son who read corporate reports, financial textbooks in high school. Skull & Bones at Yale. Learned along side billionaire investor Daniel Och in risk arbitrage department at Goldman Sachs. In 1988 he went solo and later acquired Kmart in bankruptcy by buying its bonds. He merged with Sears, Roebuck and has served as chairman of combined company since 2005.

http://www.forbes.com/profile/edward-lampert/

lonestarnot

(77,097 posts)

6. Raped by a pencil job.

Reply to rfranklin (Reply #2)

Thu Jan 12, 2012, 10:54 AM

Jan 2012

Fucker pencilling them out of their eye teeth.

FreakinDJ

(17,644 posts)

3. Sears is OWNED by K-Mart

Reply to WI_DEM (Reply #1)

Thu Jan 12, 2012, 10:45 AM

Jan 2012

I hate to think it but now they are pulling credit lines for American Manufactures ??

Bolo Boffin

(23,796 posts)

4. They are thinking that Sears will not be able to pay the manufacturers.

Reply to FreakinDJ (Reply #3)

Thu Jan 12, 2012, 10:51 AM

Jan 2012

It's similar to when a restaurant is not allowed by its suppliers to be billed or write a check for supplies. They have to pay cash on delivery.

This is one step above that. The manufacturers might take out a loan to build products for Sears, anticipating paying the loan back when they get paid by Sears. The loan company is forcing the suppliers to put Sears on a more direct payment plan.

lonestarnot

(77,097 posts)

5. Poor old Sears and all of its workers.

Reply to Javaman (Original post)

Thu Jan 12, 2012, 10:53 AM

Jan 2012

Sad.

Old Codger

(4,205 posts)

7. Sears credit cards

Reply to Javaman (Original post)

Thu Jan 12, 2012, 11:07 AM

Jan 2012

Not surprising when they have a 25% interest on their instore credit.

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