Report: Suppliers Starting To Cut Sales To Sears And Kmart

Image courtesy of JeepersMedia

Retailers’ shelves and warehouses are stocked up for the holiday season, but suppliers are reportedly holding back from the stores belonging to one company. Sears Holdings, the parent company of Sears and Kmart, reportedly is having shipments to its stores cut by suppliers, who don’t want to be stuck with the bill if the company files abruptly for bankruptcy protection.

That information comes from a risk management executive who spoke to Business Insider and deals with suppliers’ insurance on their shipments, who reports that vendors selling everything from toys to TVs are cutting back on shipments, and of course using his firm to insure them in case anything happens to Sears Holdings in the coming months.

While one supplier has reportedly ended its relationship with Sears Holdings, others are simply sending smaller shipments to the retailers so the payment turnaround time is faster.

The retailer, for its part, insists that it isn’t headed for default. “We are an asset-rich enterprise with multiple resources at our disposal,” spokesman Howard Riefs told Business Insider. Translation: the company has plenty of real estate that it still owns and can sell to its affiliated real estate investment trust to raise cash when needed, sometimes even appearing to make a profit.

Sears suppliers fear the company is going bankrupt [Business Insider]

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