In the face of several published reports that raised questions about the financial health of Sears, the company has fired back, saying it has “significant financial flexibility” to execute its transformation and meet obligations.
Responding on Wednesday to what it called a “misleading article recently published,” Sears Holdings officials took to its blog to outline “the facts” in a bullet-pointed statement as it pertains to its fiscal health. Earlier in the day Wednesday, several reports indicated that some leading insurance companies were refusing to insure vendor shipments to Sears, and that one medium-sized vendor had stopped shipping the retailer.
In its statement, Sears officials said several recent moves, including the proceeds from the Sears Canada rights offering and the Lands’ End spinoff, has generated up to $1.445 billion in liquidity in fiscal 2014.
Also, the company said it continues to meet all obligations, including paying vendors and suppliers, and currently has nearly $6.5 billion in inventory. “We also enjoy long-term supply contracts with several of our major vendors which ensure us a regular flow of goods in some of our most important categories,” the statement said.
Responding to the moves by insurers, Sears said put prices and other forms of insurance reflect “perception and not factual reality.”
The company said that it would continue working with lenders over the next six to 12 months to evaluate its capital structure with a goal of achieving more long-term flexibility, and may take other actions as appropriate.