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As Sears stumbles, suppliers grow uneasy: Report

A shopper at Sears
AP
A shopper at Sears

Sears shares moved slightly lower on Wednesday, after a media report said the department store's suppliers have asked for more favorable payment terms after a string of dismal sales results.

According to MarketWatch, which cited people familiar with the situation, Sears' vendors have become more cautious about shipping products to the retailer, whose annual loss accelerated from $1.4 billion in 2013 to $1.7 billion last year.

As a result, the website said Sears has offered to speed up payments to certain vendors to 15 days, asking in return for a discount between 3 percent and 5 percent. The department store typically pays suppliers within two months, MarketWatch said.

Sears spokesman Chris Brathwaite told MarketWatch that the department store is meeting all its obligations, which includes vendor and supplier payments.

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MarketWatch's report comes one day after a piece in AdWeek, which said that Sears is having trouble landing an agency with which to spend its $560 million a year media budget.

The iconic department store is attempting a complete overhaul of its business, including a shift toward becoming membership-oriented. As part of its transformation, CEO Eddie Lampert has closed hundreds of the company's stores and is moving forward with plans to convert hundreds more into a real estate investment trust, to help shore up its financials.

While most analysts remain critical of the company's tactics, and doubt whether it can ever return to profitability, Lampert pointed to its "significant improvement" in the fourth quarter as evidence that the changes are working. In that period, Sears' net loss attributable to shareholders was $159 million, compared to a loss of $358 million the prior year.

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"While we clearly believe that we can improve upon these results, we are pleased with the positive trend that started in the third quarter, and we currently expect this level of improvement to carry forward into our full year 2015 results," he said in the company's earnings release.

As of Jan. 31, Sears had $800 million in availability under its credit facility and $250 million in cash.

To read the full MarketWatch report, click here.