Sears has filed another lawsuit against a supplier of its Craftsman tools brand, Western Forge, reported the Chicago Tribune.
Earlier this week, Sears CEO Eddie Lampert issued a brief update to a complaint with vendor One World, also a Craftsman supplier, saying in a blog post that the matter had been resolved to the mutual satisfaction of both parties. Last month, Lampert asserted the tool maker was attempting to renege on its contract and threatening to sue Sears in court.
Lampert and other Sears executives in the past have taken to the company’s blog to refute claims of trouble paying vendors. Lampert recently complained that media stories on a possible Sears bankruptcy have served as an excuse for suppliers to slow shipments and ask for more onerous terms.
Sears has been closing stores at a rapid pace — moving to shutter an additional 66 doors on top of the 180 closures already announced this year, a source close to Sears told Retail Dive on Tuesday. Among the new round of planned closures are 49 Kmart and 17 Sears stores.
Lampert's swipe at the media aside, much of the cloud hanging over Sears stems from analysts and the company's own financial disclosures and annoucements. For example, in December Sears reported its 20th consecutive quarterly sales and revenue miss, and announced it would accelerate the closing of unprofitable stores to combat declines. With store closures for the year now at just under 250, Sears has nearly halved its store footprint since 2012, from 2,019 to fewer than1,200 this year, once all planned closures are made.
The company also sold its popular Craftsman tools line to Black and Decker for $900 million and has begun outsourcing the Kenmore home appliance brand. (Sears's deal with Black and Decker allows the retailer to sell Craftsman tools sourced from its own suppliers without paying royalties for 15 years, hence the post-sale suits against suppliers.)
In March, Sears expressed diminished hopes in its ability to continue operating, according to its annual report filing with the Securities and Exchange Commission. That alone might make vendors nervous, but many analysts have also signaled that the company is spiraling out of control.
While Lampert and Sears defend layoffs and other restructuring efforts as a sober path back to viability, in practice the moves have served to pay debt and stave off death, as opposed to devoting resources to retail essentials. For example, rather than devising a plan to rebuild store traffic and drive growth (its much touted and somewhat successful Shop Your Way loyalty program notwithstanding), Sears continues to rely on financial moves that merely prop it up, Greg Portell, lead partner in Retail Practice at consulting firm A.T. Kearney, told Retail Dive earlier this year.