The report looks like a disaster
Everything is going in the wrong direction:
Revenue is down, even same store sales is down, showing that existing stores are not becoming more efficient or running better
Losses are up, even closing a lot of stores did not reduce the overall loss
They are planning on selling off the last of their brand names and real estate, but what good will that do if it is just going to be dumped into trying to save the money losing retail stores.
Margins are down, so the company is getting less efficient.
It does look like the end will come sometime in 2017. I can't see vendors extending credit after the end of this holiday season.
I can see the company deciding to file Chapter 11 just after the holiday season is over (Jan or Feb 2017?), since at that point the company would have the most cash stockpiled from all of the holiday sales, but not paid any vendors for any of the inventory, leaving the vendors as unsecured creditors in a filing.
It would also allow them to direct the sale of the real estate and brand names towards the more secured debt holders instead of being used to pay off the unsecured vendor payables.
I think any vendor that has open terms with anything related to Sears has got to be either out of their minds or engaged in charitable giving for when the company finally goes Chapter 11 and leaves the unsecured liabilities with a repayment of zero.
I still find it hard to believe that a company that was, at one point (late 1970s/early 1980s) was once a financial powerhouse and even though to about to become a 'one stop place' for anything a person could want or need. That was about the time that it looked like they were going to offer banking and other financial services within the stores, plus their own credit card that would have been on the same level as Visa, Mastercard or American Express.
Louis J. Desy Jr.
