Sears Holding Corp. (NASDAQ: SHLD) may have enough capital to get the inventory it needs for its stores during holiday season, but the chain now needs to worry about whether its potential customers will have access to credit.
According to Bloomberg News, Home Depot (NYSE: HD), Sears, "and other retailers may lose as much as 8 percent of their holiday sales this year because lenders and stores are clamping down on financing."
For a company struggle as much as Sears, that much damage to sales could cause the company to close hundreds of stores and put tens of thousand of people out of work. Along with all of its brands, Sears has 3,800 stores and 337,000 employees. If its average store loses close to 10% of sales, weaker ones in the states hardest hit by the recession could lose 15% or 20%.
Sears might offer more credit to customers, but it risks that a large part of them will default or delay payments as the economy gets worse.
The Sears problem is an especially good example of what happens when a large economy goes into a flat spin. As revenue at companies drops due to falling consumer spending, those firms have to layoff workers to make ends meet. Those workers, in turn, are no longer consumers and their loss of spending power hurts GDP even more.
Sears is a weaker retailer then some, and the chances that it will have to downsize to survive are very high.
Douglas A. McIntyre is an editor at 247wallst.com.











Reader Comments (Page 1 of 2)
11-02-2008 @ 6:00PM
ESL said...
This guy is an idiot. There is more to Sears than the retail.The company is called Sears Holdings.
Wait for the Autonation news to come out.
Ackman has Sears as its second largest holding.
11-02-2008 @ 6:05PM
ESL said...
FOLLW THE MONEY LEADERS NOT THE EDITORS.
LAMPERT HAS HIS OWN MONEY IN SEARS HOLDINGS.
HE IS THE RICHEST MAN IN CONNECTICUT.
11-03-2008 @ 7:14AM
BRK said...
Sears Holdings will be the next Berkshire Hathaway. Eddie Lampert is the best financier out there next to Buffett.
You have giant financiers buying his stock.
Sears Holdings will own Autonation,Autozone and others under its umbrella.Die Hard batteries in all their vehicles and stores.,,etc.
It is all part of Lampert's long term strategy.
11-03-2008 @ 8:45AM
BRK said...
Sears Holdings will be the next Berkshire Hathaway.
Simply Sears and Kmart will not be the focus of Sears Holdings the company. The other investments by Lampert will.
11-03-2008 @ 6:01PM
AUTO SEARS said...
This is true. Looks like Eddie is looking to get into the auto business along with Buffett.
He has bought massive amounts of Auto Zone stock last week.
Sears will hold one of the largest car retailers and services under its umbrella.
SEARS STOCK IS ON SALE.
11-04-2008 @ 6:59AM
MARRIED SOON said...
SEARS AND AUTONATION AND AUTOZONE TO MARRY SOON.
THE LARGEST CAR SALES AND SERVICE RETAILER IN THE WORLD UNDER SEARS HOLDINGS UMBRELLA.
FOLLOW THE LEADERS - LAMPERT,ACKMAN,BERKOWITZ.
11-04-2008 @ 7:27AM
BULL EATS BEAR said...
ALL TRUE ALSO LOOK FOR CITIGROUP TO MERGE WITH GOLDMAN SACHS.
11-04-2008 @ 12:35PM
DUMMY DOUGLAS said...
At the moment the analysts and editors can only judge Sears on its old retail business because Lampert as of yet has not made his move.
Although one must think that these people must realize that a holding company consists of many investments but they are judging Sears now as just a retailer.
I agree with the post stating follow the financial majors and not the English majors.
11-04-2008 @ 1:55PM
QQQQ said...
How in the world can people read or listen to people that do not see the full picture of something.
This blog is a perfect example from this Doug character.
Why don't you blog about why Lampert is buying so much of Autonation and Autozone.Have you checked the sec filings or are you picking your nose and looking just at the economy and trying to act like a genious by saying this year's christmas will be bad for retailers.
By the way you are an editor not a financier why don't you go write about the weather.
11-04-2008 @ 3:41PM
AVENTURA said...
If you were on a football team would you want a coach that played football when he was younger or wrote about football.
Thank you
11-05-2008 @ 5:30PM
Aventura said...
The majority of Eddie Lamperts fortune is in Sears Holdings.
He is one of the richest people in the world.
He is in his forties.
11-06-2008 @ 7:34AM
SPX said...
Eddie Lampert is a long term investor.
He has never lost focused.The obvious is the dividing of the company.Next was the purchasing of shares of Autonation and Autozone, and most recently is the closing of stores and openings of new stores.
Big aquisitions will be announced very soon.
11-06-2008 @ 1:05PM
SHORT COVERING said...
There are not enough shares to cover all the short positions.
Sears is going to gap up on good news and on shorts trying to cover.
11-06-2008 @ 2:49PM
SHORT COVERING said...
ALL THE SEARS AUTO DEPARTMENTS WILL CHANGE TO AUTOZONES.
SEARS AUTOZONE
11-08-2008 @ 7:40AM
BERKOWITZ said...
BERKOWITZ SAID THAT WHEN SEARS WAS AT $100 IT WAS DIRT CHEAP AND THE BREAK UP VALUE WAS GREATER AND IF THE RETAIL TAKES OFF THE STOCK WILL BE A ANOTHER HOMERUN.
IN OTHER WORDS SURPASS BERKSHIRE HATHAWAYS RETURN.
11-08-2008 @ 7:49AM
AVENTURA said...
Lampert has already set up businesses affiliated with the Sears brands that will generate cash flow to Sears.
This has been done but ofcourse the shorts do not want to put this news out.
This is SEARS HOLDINGS not SEARS RETAIL,and Edward Lampert is running it.
SEARS HOLDINGS THE NEXT BERKSHIRE HATHAWAY.
11-08-2008 @ 1:51PM
CITIGROUP AND G SACHS said...
CITIGROUP AND GOLDMAN SACHS TO MERGE SOON.
WHAT A COINCIDENCE EDDIE LAMPERT OWNS CITIGROUP STOCK AND HE WORKED FOR GOLDMAN SACHS TOO IN THE BEGINING OF HIS CAREER.
11-08-2008 @ 1:55PM
SEARS AUTOZONES said...
GRAND OPENINGS OF SEARS AUTOZONES.
LOOK FOR MANY OF THE KMARTS LOCATIONS TO TURN INTO SEARS AUTOZONES.
COVER YOUR SHORTS.
11-09-2008 @ 8:53AM
DOUG NO RESPONSE said...
DOUG WHY ARENT YOU RESPONDING TO THE POSTS.
WHY ARE YOU JUST PICKING ON SEARS AND NOT THE OTHER RETAILERS.
11-10-2008 @ 6:52AM
BULL said...
DOUG IS SPEECHLESS.