Sears Holdings Replies to Wall Street Journal
Sears Holdings have posted a reply to the WSJ about why the company pays back the retailers earlier than any other company
In a recent news release it was seen that the Wall Street Journal criticized Sears Holdings for paying back retailers earlier than any other multinational firm which raised a lot of speculation from the analysts as well. The company has been making offers to the vendors to pay the required amount quicker as compared to other companies. This step of the company has been the victim of the criticism of different analysts and investors of the financial market. However, in a recent note the American firm did not fall behind and presented a note in which it said that the analysts at Wall Street are ignorant to the fact that this early cash payback to the vendors might also be doing the company some good.
In a note submitted by Sears Holdings on 19th March 2015, it was seen that the company discussed about how they are capable of carrying out such actions as they can afford to do so and other companies in the industry are not. The company’s also mentioned in the note that this act of the company has been helping them to obtain attractive discounts as well other benefits that is one of the many reasons why the company is doing this. This type of trade is helping the company carry out trade in a better way as not every vendor is interested in offering discounts.
Payments that are received by the vendors in a shorter time period than expected have attracted more and better vendors to the Sears stores. Sears has formed a plan to pay back retailers as the company knows that this will create more chances to do trade in a more refined way with benefits and discounts that are not being giving to any other retailer chain. The company has also given the example of a family that would pay their credit card bills earlier if they are getting a discount or a benefit out of it. Sears has related this example to the company’s own current situation.
As for the Sears Holdings new, the company has also disclosed that the rumor about the company’s vendors obtaining insurance plans for themselves is not true as the company has never before disappointed any vendor and has always paid to them in time. And that even if they have, the insurance companies have never been called to pay claims for the vendors that supply to the company. This is due to the fact that the company has never fallen back to pay back to their vendors no matter what the situation may be.