This is last weeks news, but better late then never. Just wanted to point out to those of you with open projects for Sears / Kmart, be careful. As recently reported in Reuters CIT Group will no longer provide loans to Sears' suppliers to finance their shipments to the struggling chain.
The news triggered fears that other lenders to Sears' suppliers could follow a similar path, making it harder for the retailer to do business.
"It could start a snowball effect for Sears," turnaround expert Gene Baldwin of CRG Partners said.
When CIT or other lenders refuse to finance Sears' suppliers, Sears may have to draw on its line of credit to pay for goods up front, Baldwin said. If too many vendors seek prepayments, banks may be pressured and cut back on lines of credit for Sears, making it harder for the retailer to purchase inventory.
You can read the full article at Reuters about how CIT Group Halts Supplier Loans to Sears. The address to the article is http://www.reuters.com/article/2012/01/12/us-sears-idUSTRE80B0Y720120112
What do you think will happen with Sears & Kmart?
Will both divisions survive?
Will either survive?
Will both survive?
In fairness, it is important to point out that some companies turn around from this sort of issue.
What is your opinion?
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