May 16, 2017

RETAIL BLUES: Wary Vendors May Mean the End for Sears Holdings.

In [CEO Eddie] Lampert’s blog post, he calls out one specific vendor, One World, which he notes is a subsidiary of Techtronic Industries, a conglomerate based in China with over $5 billion in revenues. He said that the company, which Sears has purchased from for nearly a decade, refuses to meet the terms of its current agreement.

“One World has informed us of their intention to take the very aggressive step of filing a lawsuit against us as they seek to embarrass us in the media to force us to let them out of their contract,” he wrote.

Lampert argues that Sears has lived up to its agreements, paying One World more than $868 million since 2007 for various tools it sells the retail chain. He also noted that his company has paid its bills on time.

The problem is that while Sears may be able to force vendors to honor existing contracts, the reasonable fear that the chain at some point won’t pay its bills means this probably won’t be an isolated incident. Lampert has basically been publicly pleading for vendors to support his company, and that support is clearly wavering.

Sears has had a difficult enough time getting customers into its stores. Now the company is on the verge of having difficulty getting product on the shelves.