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What's Going Wrong at Sears Now?

The more merchandise a department store carries, the better. Broad inventory filled with brand names boosts a retailer's chances of "giving the lady what she wants"- the key to success, according to none other than Marshall Field. So it can't be a good sign that Converse Inc. has stopped selling shoes to Sears Holdings Corp.

Nor is it a good sign that companies that insure supplier payments are tightening policies on sales to Sears, or that the cost of credit protection on the retailer's debt has risen to its highest level since 2012.

To be sure, Sears faces no holiday-season money crunch. But these actions suggest a deepening concern about the company's inability to make money from its stores and increasing reliance on asset sales to generate cash.

“When one player starts to get worried (and pulls out), that's something that can potentially spread fast,” says Steven Dennis, an independent retail consultant in Dallas and former Sears vice president. “People are very worried about getting stuck with a lot of liability.”

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