Bradley attorney Bill Norton was quoted in Yahoo Finance on the new bankruptcy filing from Sears Holdings Corp., which makes the retailer’s viability uncertain after eight straights years of losses. The ability to buy inventory on credit – underpinned by confidence in the company’s financial standing – is the lifeblood of a retailer. Once that confidence is broken, as is the case with cash-strapped Sears, it could raise the cost of doing business to insurmountable levels. In the end, a retailer enters a spiral of paying out cash quicker than is coming into the business by way of selling merchandise.
Sears may find it a little easier to get inventory while in bankruptcy protection, but not significantly so. “It’s easier for a supplier to give inventory post-bankruptcy because [the vendors] have priority,” explained Norton.
The complete article, “Here’s what triggered the Sears death spiral into bankruptcy,” appeared in Yahoo Finance on October 15, 2018.