Credit insurance providers reducing exposure to Sears
Bloomberg highlights that credit insurers — firms who provide suppliers insurance guaranteeing payment by a retailer — are starting to tighten the noose around Sears Holdings Corp (NASDAQ:SHLD). David Huey, the president and regional director of North America for Atradius, said the credit insurance company is decreasing its Sears supplier coverage “as the problems have become more obvious.”
“We’ve reduced as we’ve seen the risk increase,” he said in a recent interview. Alhough no policies have been canceled yet, “it could happen,” he noted. “We’re reviewing it regularly.”
Statement from Sears
Illinois-based Sears said in a statement that it is working closely with vendors and has never paid anybody late.
“We continue to meet all of our obligations,” Chris Brathwaite, a company spokesman, noted in an e-mail statement. “We are continuing to work with our vendors and suppliers and are communicating with them regularly as we move through our transformation. To date, we’ve had no interruptions in the flow of goods to our company.”
Sears has been raising cash
Sears Holdings Corp (NASDAQ:SHLD) CEO Edward Lampert, who also is the firm’s largest shareholder, has recently been selling off assets to raise cash following more than two years of losses. The company announced plans to sell most of its stake in Sears Canada just a few days ago, which will lead to a cash infusion of around $380 million over the next few months.
Not including today, the stock is down by a quarter for the year, bringing its market value down to about $3.2 billion.
