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Despite a string of losses dating back to 2012, Sears is still paying its vendors and meeting its other financial obligations—and it wants everyone to know it.
One day after The Wall Street Journal and its sister outlet MarketWatch reported that vendors have become more cautious about shipping products to the retailer, the department store's chief financial officer, Rob Schriesheim, wrote a post on the company's blog questioning why it would be considered a bad thing if Sears can afford to pay suppliers in a tighter time frame, and therefore negotiate a discount.
He added that the company is moving forward with its plan to convert between 200 and 300 of its stores into a real estate investment trust, and it expects that transaction—which would provide Sears more than $2 billion in cash—to be completed by June 1.
The Journal on Wednesday had reported, citing people familiar with the situation, that Sears had offered to speed up payments to certain vendors from the typical two months to 15 days. In return, it was asking for a discount between 3 and 5 percent.
"Why would that be a bad thing if we can afford to do so and we get a discount or other benefit from doing it?" Schriesheim wrote on the company's blog.
"We have 50,000 suppliers and vendors. Providers of insurance have never had to pay a claim to any vendor tied to SHC's business. What does that mean? We are paying our vendors and meeting our obligations as we always have. Vendors who spent their own money to hedge against non-payments did nothing more than decrease their profits. "
Schriesheim went on to say that Sears has reduced its fourth-quarter inventory levels over the past three years by $1.4 billion and reduced its payables by $712 million. That, he said, decreases the level of vendor support and supplier credit required to run its business.
He added that while the company's financial performance isn't where the firm would like it to be—Sears had a loss of $1.7 billion last year, compared to $1.4 billion the prior year—it is making headway toward its goals. He cited improvement in the company's fourth-quarter results as an example.
In that period, Sears' net loss attributable to shareholders was $159 million, compared to a loss of $358 million the prior year. According to Retail Metrics, Sears hasn't posted a quarterly profit since the fourth quarter of 2012.
The company's shares were slightly higher in Thursday afternoon trading.