Sears Holdings Corp has started to miss payments to vendors, adding to concerns about its future after sources said the U.S. department store operator was preparing to file for bankruptcy in the coming days.
Three vendors told Reuters that Sears has missed scheduled payments in the last couple of weeks.
It was not immediately clear how widespread the vendor problems were and how they would affect Sears’ supply chain ahead of the holiday shopping season. Sears is also scrambling to secure financing for its expected bankruptcy, and has been unsuccessful so far, sources familiar with the effort said late Wednesday.
Vendors could stop shipments if they are worried Sears cannot pay, potentially sending the retailer into freefall.
“We went into business with them with our eyes open and knew this day would come one day,” said Arnold Kamler, chief executive officer of Parsippany, New Jersey, bike maker Kent International Inc. Kamler said he withheld a shipment to Sears after it missed a regular payment last week for the first time.
Sears did not respond to multiple requests for comment.
Vendors are usually considered unsecured creditors and usually get pennies on the dollar in bankruptcy court.
Timely, incisive articles delivered directly to your inbox.