2016 is ending on what has become a familiar note for Sears.
As it prepares to close more stores, the struggling retailer has secured a letter of credit. Once again, ESL Investments, Inc.—for which Edward Lampert, Sears Holdings Corporation’s chairman and CEO, is also the chairman and CEO—has come to the rescue. Citibank, N.A. served as administrative agent and issuing bank.
The secured standby letter of credit is for an initial amount of $200 million, which may be expanded up to a total of $500 million. The move provides the parent company of Sears and Kmart stores with liquidity to continue operations.
“This new standby letter of credit facility further demonstrates that Sears Holdings has numerous options to finance our business strategy,” said Jason M. Hollar, Sears Holdings’ chief financial officer.
This comes just one day after Business Insider reported more than 30 Sears and Kmart stores will shutter in early 2017. The locations include 24 Kmart doors and eight Sears stores across nine states.
The move brings the total closures for the former retail powerhouse to 200 in this fiscal year. That’s a 60 percent drop since 2011, when the company operated more than 3,500 stores.
The closures are an attempt to cut overhead and slow losses. In its third quarter report, released December 8th, the company posted a net loss of $748 million for the quarter, compared to a $454 million loss for the prior year period. Revenues fell $721 million to $5 billion.
Comparable store sales fell by 4 percent and 10 percent at Kmart and Sears, respectively, for the same period.
At the time, Hollar assured investors that the retailer was committed to managing business and meeting financial obligations.