has borrowed about $150 million from lenders including owner Eddie Lampert, according to people familiar with the matter. Sears was unable to borrow as much as it wanted because lenders were concerned about the 126-year-old company's prospects and financial wherewithal, according to the sources.
The new financing will help stock Sears' store shelves for the holiday shopping season, as it struggles to become profitable. Lampert is no stranger to bankrolling Sears, having extended loans through his hedge fund ESL Investments Inc to the department store chain over the last decade until its financial collapse last year.
Among those that provided the financing was hedge fund Cyrus Capital Partners LP, which extended a loan to the retailer while it navigated bankruptcy court last year, one of the sources said. Sears is still hoping to negotiate with lenders and secure the roughly $200 million, one of the sources said.
Lampert, formerly the company's chairman and CEO, had pledged to restore Sears to its glory days, when it owned the tallest building in the world and companies that included a radio station and Allstate insurance. Lampert combined Sears and rival chain Kmart more than 15 years ago, heralding the formation of a retailer with $55 billion in annual sales. But revenues subsequently plunged amid the rise of online shopping and large retailers such as Walmart.
The transaction closed in February, creating a smaller Sears now operating under the moniker Transform Holdco LLC.
jimcramer why do we keep propping up Sears? Why not just let it close?
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