Sears Suing Top Tool Vendor Over Contract Breach
In the midst of closure threats, it appears that Sears is not going down without a fight. The company is suing a top tool vendor, attesting that this vendor refuses to honor its contract with the retailer.
Indeed, Sears Holding CEO Eddie Lampert says he is “taking a stand” in order to protect his company. He asserts, “There have been examples of parties we do business with trying to take advantage of negative rumors about Sears to make themselves a better deal — a deal that is unilaterally in their interest.”
He goes on to say that this effort looks to ensure their level of credit risk to be “both affordable and appropriate,” as he does his best to save the drowning company.
“In such a case,” he additionally remarks, “we will not simply roll over and be taken advantage of — we will do what’s right to protect the interests of our company and the millions of stakeholders we serve.”
In addition, the CEO also mentioned that one of Sears’ vendors has been particularly finicky lately. This is the China-based subsidiary of Techtronic Industries known as One World; they make various kinds of power tools, like those Sears sell under the Craftsman brand.
In his statement, Lampert notes, “For over nine years, One World has enjoyed significant benefits from its relationship with Sears — we have paid One World more than $868 million since 2007.”
He adds that One World had planned to file a lawsuit against Sears, seeking to “embarrass us in the media to force us to let them out of their contract.” But, he notes, Sears has nothing to be embarrassed about. He continues, “If we allowed One World to break their agreement, it would effectively reduce the flow of products they are required to deliver to Sears, harming our ability to sell tools, supply parts, and provide goods to Sears’ members and customers. We won’t allow that to happen.”
With all of this in mind, Sears shares closed down more than 12 percent on Monday, after Lampert made his comments.
In closing, Lampert also says: “We’re fighting like hell to change the way people do business with us.”