Sears cash burn has suppliers growing leery of Lampert

Eddie Lampert has a big problem with appliances — and it’s not something a Sears repairman can fix.

The billionaire chairman of Sears faces mounting pressure for financial assurances from the retailer’s suppliers, even as he seeks shipments of everything from big-ticket appliances to electronics, housewares and clothing, sources told The Post.

The suppliers — and the lenders that finance their deliveries — have grown skittish because Sears has burned through nearly $1 billion in the first half of the year.

The lenders — called factors in the retail trade — have restricted credit to the hobbled department store as the crucial holiday season approaches, according to industry insiders.

Lampert — who is as tight-lipped as he is tight-fisted, critics charge — finally relented this week to the supplier jitters by using his hedge fund, ESL Investments, to issue a $400 million loan to the cash-strapped retailer he controls.

Wall Street wasn’t impressed.

The Lampert loan was seen as a sign of uncertainty about the retailer’s business — as it was secured by 25 real-estate properties owned by the chain.

Sears shares plunged to a 52-week low of $30.16 on Wednesday before closing 9.4 percent lower at $30.37.

Still, fears among suppliers and trade lenders are of more immediate concern to Lampert, who has slashed inventory by more than $1 billion over the past year in a desperate bid to conserve cash.

This year, small and mid-size suppliers privately gripe that they have been hit by canceled and drastically scaled-back orders from the retailer’s Sears and Kmart stores.

“Cutting back on what you buy makes an awful lot of sense when you’re not selling anything,” an executive at one supplier said. “The problem is, there’s no positive end-game in that. You need customers to buy more.”

Increasingly, Sears appears to be turning to larger, better-financed manufacturers for its inventory, even as it stubbornly refuses to remodel stores, sources said.

Nevertheless, Sears merchants recently “have been complaining that they can’t get any appliances,” according to an industry source. “People don’t want to ship them.”

This week’s loan is expected to grease the wheels and keep appliances flowing through the holidays. But all bets are off when it comes to next year, financial sources said.

Indeed, commercial lending giant CIT has lately refused to finance some apparel deliveries to Sears beyond Dec. 31.

The firm is tacking on extra fees as it moves to reduce its exposure to Sears, according to several sources.

Asked about such pressure from suppliers and trade lenders, Sears spokesman Chris Brathwaite said, “That’s not what we’re experiencing,” but declined to address any specific concerns.

A spokesman for CIT said the firm doesn’t comment on individual clients.

With terms from traditional factoring firms like CIT prohibitively expensive, many suppliers have turned to financing alternatives that include credit insurance. Some are even buying credit default swaps from big banks, like JPMorgan Chase, to hedge their Sears risk, sources said.