Eddie Lampert Lends Sears Another $500M, Backed By Sears Real Estate

Sears Holdings hasn't reached rock bottom yet but one has to wonder if the faltering retailer is close. CEO Eddie Lampert is lending the company $500M to cover operations and financial obligations. The loan was secured by Sears real estate assets and has an 8% interest rate.

The loan, issued through Lampert's ESL Investments, is the latest attempt by Sears to offset plummeting sales. The company has lost $9.4B over the past years, reported a $748M deficit last month and needs to raise $1.5B in 2017 to make it through the year with some level of comfort, Bloomberg reports.

The company is hoping another big sale of its real estate assets can bring an infusion of cash. Lampert established Seritage Growth Properties in 2015 and raised $2.7B in a sale-leaseback of 254 Sears and Kmart stores. Lampert, also through ESL Investments, purchased a $200M stake last March in a $750M loan Sears obtained to pay down maturing debt. That loan was backed by Sears inventory and receivables, and if the retailer is forced to liquidate, Lampert would be paid in full.

Lampert's previous moves have been met with scrutiny. In 2015, Sears shareholder John Solak filed a class-action lawsuit alleging that Lampert's attempts to turn Sears around were done mainly for his own benefit. [Bloomberg]

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