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Clothing Company Sues Sears Over Unpaid Orders

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Children’s clothing firm SCI Apparel, previously known as Sprockets, is suing Sears Holdings for its shipments it said the retailer never paid for.

In a lawsuit filed in Cook County, Ill. Circuit Court Monday, SCI Apparel said Sears owes it roughly $4 million for clothing orders, and an additional $750,000 for fixtures and signs, the Chicago Tribune reported.

According to the lawsuit, Sears would cancel orders “routinely and deliberately” after they had been placed and then refuse delivery of the items after they’d already been produced and shipped. SCI also reportedly sent Sears signage to create a shop in shop concept featuring its clothing, and the retailer never developed the concept, or paid for the product. The incidents are said to have occurred in 2010 and 2011.

Sears has not commented on the lawsuit.

The struggling retailer has been in a downward spiral in recent years. In 2014 alone, Sears Holdings shuttered more than 200 stores, sold and leased its retail space, issued a $625 million rights offering of unsecured notes to drum up cash, sold its stake in Sears Canada for $380 million, and borrowed $400 million from its CEO. In its third quarter report released in December, Sears Holdings said net loss totaled $548 million, or $5.15 per diluted share, and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) loss was $296 million.

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