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Reports: Sears approaches financing deal, could shutter up to 150 stores

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Reports: Sears approaches financing deal, could shutter up to 150 stores

Sears Holdings Corp. could get financing from its lenders to help it stay alive until the critical holiday shopping period even as the department store operator quickly approaches bankruptcy, CNBC reported Oct. 12 citing people familiar with the matter.

The initial financing would total around $300 million to $500 million to support operations through holiday shopping, which is the department store sector's biggest and most important season. That amount could increase over time, CNBC reported.

The department store operator has not yet found a buyer and will keep looking after filing for bankruptcy as early as the weekend, according to the CNBC report.

Reuters reported Oct. 12 that Sears could shutter up to 150 locations as part of its bankruptcy restructuring, citing people familiar with the matter. The department store operator would keep at least 300 stores open, leaving the fate of about 250 stores up in the air depending on negotiations with landlords, according to the Reuters report.

The last-minute funding would come after Sears' bank lenders, including Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., pushed the beleaguered department store operator to liquidate earlier in the week, The Wall Street Journal reported Oct. 11.

Sears appears to be barreling toward bankruptcy as early as this weekend as it approaches a $134 million payment due Oct. 15. Sears, which has consistently topped S&P Global Market Intelligence's probability of default list of apparel and department stores, has been relying on outside loans to make payments on its $5.5 billion debt.

Most of those loans have come from Edward Lampert, Sears CEO and chairman, who repeatedly bailed out the department store operator with short-term financing from his hedge fund ESL Investments. But Lampert has said he will not extend more financing unless the Sears board considers his restructuring proposal and the sale of Sears' Kenmore brand and other assets, according to an earlier report by Reuters.

Lampert is still exploring the purchase of Kenmore if Sears auctions it off in bankruptcy, according to the Reuters report. The CEO has previously offered as much as $480 million to buy Sears' storied Kenmore appliance brand and the company's home improvement unit.