Sears Has One Foot In The Grave And The Other Foot Is On Eddie Lambert’s Financing Banana Peel

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Most people know the Sears story. Sears is on the verge of joining Toys R Us in the retail graveyard. The iconic retailer didn’t change with the times. The invincible mindset within the company finally caught with the Chicago-based dinosaur. To say that Sears did all it could to save itself from bankruptcy would be a Trumpian statement.

Sears allowed Amazon, Target, and Walmart to step all over them while CEO Eddie Lambert tried to pull Sears away from its core strengths. Lambert’s decision to sell the Diehard, Craftsman, and Kenmore brands was a major screw-up, according to retail analysts. And the fact that Lambert didn’t invest in store upkeep made the stores look like they belonged in a third world nation.

But Lambert, the hedge fund investor with deep pockets, and a lot of rich friends believes he can still save Sears. Lambert wants to take over what’s left of Sears. But the bankers who control Sears Holdings Corp. aren’t that excited about the Lambert offer. The bankers know Lambert wants to buy the crippled retailer at a bargain basement price. But the group of bankers in charge isn’t buying what Eddie wants to sell them.

Mr. Lambert’s $4.4 billion bid for the Sears shipwreck didn’t impress the bankers. Evidently, Lambert’s bid undervalued the remaining inventory, and Lambert’s financing terms didn’t sit well with the bankers. The bankers want Lambert’s firm, ESL to come up with more cash to cover the cost of the bankruptcy. And they wand ESL make a cash pledge that would back up the credit piece of Lambert’s bid. The Lambert deal isn’t the only deal on the table. But it is the only deal that would almost keep what’s left of Sears intact.

Two other companies submitted offers to the bankers. Great American Group LLC and Tiger Capital Group LLC want to get their hands on Sears, and so does Gordon Brothers Retail Partners LLC. But those companies may not try to bring Sears back to life. They could dismantle it piece by piece in order to recoup their investment and make money while they do it.

The demise of Sears will put more than 50,000 Sears workers on the street. Eddie Lambert wants to stop that. But some retail analysts say Lambert had a chance to make Sears great again, but he failed.

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