•Additional secured financing: ESL lenders provided Sears up to $500 million through a secured letter of credit facility in December, from which Sears has already drawn $200 million. ESL lenders also hold $336 million in secured debt issued to Sears in April through a separate facility and term loan, as well as $300 million in a second lien term loan issued in September. Secured lenders are paid first in bankruptcy.
•Sears Canada: Sears partially spun off its Canadian division in 2012, but Lampert’s ESL owns about 45% of the company. That stake was worth nearly $80 million as of Wednesday morning.
•Sears Hometown and Outlet Stores: Sears spun off the franchise in 2012, but ESL retains 57% ownership of the company. That stake was worth about $45 million as of Wednesday morning.
Also, Sears Hometown and Outlet Stores still acquires “a significant amount of its merchandise” from its former parent company “at cost,” according to a filing.
Sears Holdings also provides certain logistics, warehousing, human resources, information technology and transportation costs to Sears Hometown and Outlet Stores, which is invoiced weekly and also pays its former parent royalties on sales of certain brands.
•Paid-off financing: Affiliates of ESL and another Sears investor, Fairholme, made a $400 million short-term loan to Sears in 2014 that has already been paid back in full.
Corporate filings reveal that Lampert, who disclosed in a corporate filng that he owns all of ESL and makes all of its investment decisions, has made moves to protect his position.
“Financially he’s moved a lot of levers that have kept this company going longer than some of us thought it could,” Stern said. But with “some of those levers you’re setting the furniture on fire to keep the house alive.”
Sears did not respond to a request for an interview with Lampert, who rarely speaks to the press.
Lampert has insisted that Sears has a path to viability, despite analysts predicting the company’s demise. He has steered the company into a new loyalty program called Shop Your Way, approved store closures, authorized a supply chain overhaul and announced cost cuts.
“I firmly believe we will succeed in becoming a new kind of retailer as we provide real value to members with value offerings, personalized services and easy access to the brands, convenience and value they want, whenever and wherever they want,” Lampert said March 9 in a letter.
The company, however, hasn’t been shy about noting that Lampert’s financial prospects may be different than those of the average investor.
“Affiliates of our Chairman and Chief Executive Officer, whose interests may be different than your interests, exert substantial influence over our Company,” Sears told investors Tuesday in the public filing.
