Moneybox: The End of Retail

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Moneybox The End of Retail Troubles at Sears are just the latest sign that big-box chains may never recover from the Great Recession. By Matthew Yglesias Posted Tuesday, Jan 17, 2012, at 06:04 PM ET In its midcentury heyday, Sears, Roebuck & Co. was the Wal-Mart of its era—the largest retailer in the world with more than 350,000 employees. But it is in an epic freefall. After decades of decline, the Sears ended up in the hands of investment manager Edward Lampert, who purchased the company in 2004 and merged it with Kmart. The new combined entity, known as Sears Holdings Corporation, was consistently losing money even before the recession. The Sears Tower, the company's iconic skyscraper, no longer houses any Sears' employees and—the ultimate indignity—had its name changed to the Willis Tower in 2009. On Dec. 27, it announced that in light of poor holiday sales, 100-120 Sears and Kmart stores would have to close. An even bigger blow came last Friday when CIT Group said it would no longer provide loans to Sears vendors. CIT is not a household name, but it's the largest player in what's known as the "factoring" industry. Factoring companies offer short-term loans to manufacturers so that they can produce goods for retailers in exchange for a percentage of the total order. Sears claims there's no problem here, noting that CIT-factored goods are less than 5 percent of its total inventory. But this is clearly a vote of no confidence in a major American brand, and it sent Sears scrambling to implore other lenders not to pull the plug. Credit default swaps offering insurance against a Sears default on its debt obligations ... To continue reading, click here. Join the Fray: our reader discussion forum What did you think of this article? POST A MESSAGE | READ MESSAGES Also In Slate Dickerson: Gingrich Won the Debate Last Night. Can He Still Derail Romney? The Saints-49ers Game Was an Instant NFL Classic—but a Sad One for New Orleans Fans Downton Abbey: Stop It With the Slut-Shaming!	Advertisement
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