Sears is running out of money.
The company’s cash and equivalents have declined to $276 million from $1.8 billion one year ago, Sears said Thursday.
As a result, the retailer was forced to accept $300 million in financing from Sears CEO Eddie Lampert’s hedge fund, ESL Investments.
Sears is losing cash as sales plunge at its namesake and Kmart stores.
Net sales fell 8.8% to $5.7 billion in the second quarter. Same-store sales plunged 7% at Sears stores and dropped 3.3% at Kmart stores.
The declines were driven primarily by weakness in categories that have traditionally been Sears’ strongest, such as home appliances and apparel, and at Kmart, the pharmacy and grocery categories.
To stem the bleeding, Sears recently closed nearly 80 stores.
The company didn’t announce any additional closings on Thursday, but suggested that more could be on the way.
Chief Financial Officer Rob Schriesheim noted in an earnings call that the company’s leases on hundreds of stores expire soon, giving the company the flexibility to close those stores.
“Our lease expirations in the 1,178 stores provide us with significant option value with minimal commitments since more than half of hte leases expire in less than five years,” Schriesheim said. “This lease portfolio provides us with substantial value as well as flexibility as we continue to transition to a more asset-light member-centric retailer leveraging our Shop Your Way platform.”
In other words, Sears is planning to close more stores as soon as the leases expire.