$400m Loan From Its Own Ceo Is Only 1/10 Of What Sears Needs To Stay Alive

(Scott Miller)I don’t know about you, but if someone loaned me $400 million, it would just about cover all my debts. But I’m not a sagging national retail operation that hasn’t been relevant in decades. If I were, then I’d probably need a much, much, much bigger loan to get out of hock. Yes, as we told you earlier this week, Sears Holdings Corp., which includes the equally irrelevant Kmart, borrowed $400 million from ESL Investments, a hedge fund entirely owned by Sears CEO Eddie “What’s a few hundred million between coworkers?” Lampert. And while that substantial loan will help Sears pay down older debts and possibly get the company through the end of the year, BusinessWeek reports it’s a small fraction of the $4 billion in capital the retailer needs to make it to 2016. Sears can’t just keep borrowing money to stay open, as every lender will eventually need to be repaid, and the company’s cash flow is heading in the wrong direction. Presumably taking a break from e-mailing his buddies at other companies about job openings, a rep for Sears told BusinessWeek that “We have many assets at our disposal to continue to fund our transformation,” and that Sears has “multiple financial resources available” to generate additional liquidity. Sears has already spun off the Land’s End retail operation and is reportedly considering doing the same with its automotive business. In recent years, it has tried to capitalize on formerly exclusive brands by allowing Costco to sell Craftsman tools, and Meijer to sell DieHard car batteries. One place where Sears could raise significant chunks of money is through real estate.