February 1, 2017

Could there be further troubles ahead for Sears ?

Both Moody's and Fitch have downgraded Sears paper. This was in spite of the planned sale of the Craftsman brand. The ratings agencies cited a still significant expected cash burn in 2017. Sears was a large customer of Mattel, and I suspect the toy maker may have refused to ship to Sears.

Sears shares declined another 7% today in morning trading, and the Moody's downgrade came out after the close.

Though Edward Lampert has pulled several rabbits out of his hat, Sears' cupboard is now almost bare.

I now believe ... that a financial event at Sears may be imminent. If I am correct, a large portion of the retailer's stores will be closed and with this, about 100,000 jobs will likely be eliminated in bankruptcy.

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