At the busiest time of the year for all retailers when cash intake is at its peak, Sears Holdings announced that it will obtain a loan from CEO Eddie Lampert in order to keep the company above water. Thursday Sears said they received a $200 million loan that has the potential to be expanded to $500 million.
This loan from the hedge fund guarantees the lenders will be paid should Sears default on its debt. This request also comes after Sears announced that it will also be closing more stores. The recent quarter has not been too nice for the retailer. Revenue fell 13% and the loss for the company rose from $454 million to $748 million last year.
This isn’t the first time that Sears has needed cash. Not including its recent request, Sears has borrowed an estimated $800 million from the hedge fund in order to keep the retailer’s doors open.
According to Business Insider the CFO of Sears commented saying, “As Sears Holdings has consistently shown, we will take actions to adjust our capital structure, generate liquidity, and manage our business to enable us to execute on our transformation while meeting all of our financial obligations. This new standby letter of credit facility further demonstrates that Sears Holdings has numerous options to finance our business strategy.”