Whither Sears?

I have such fond memories of Sears. Just about any my age or older does. The huge catalog, the Christmas Wish Book, the retail stores, the candy counter. I think I just gained two pounds thinking about chocolate covered candy.

After watching the local segment of the Today show this morning, I read perhaps the most succinct story ever, the entire text of which I repeat below:

There's a dire warning from the chairman of Sears Holding Corp.

Edward Lampert said this may be the final holiday season for the Chicago-based retailer, as the company continues wrestling with falling cash reserves and expanding debt.

Experts say Sears' lack of cash could lower its borrowing capacity and prevent it from securing new lines of credit.

The retailer is now $4.5 billion in debt.

I thought when the deal went down that Sears was a dirt play, because the real estate assets weer probably worth more than the company. And people more savvy than I am thought so too. Friends and former employees I knew also agreed with the analysis.

But now, according to a Tribune article a couple of weeks ago:

Liquidity will be "paramount" for Sears next year, Morgan Stanley analyst Gregory Melich said in a Tuesday report.

In September, Melich estimated Sears and Kmart real estate was worth $7.5 billion and put the combined value of its Lands' End, Kenmore and Craftsman brands at $3.9 billion.

"We do not believe the brands or real estate have much value in the current environment and would likely be sold at distressed prices should [Sears] make a sale in the near term," said Melich.

Ow. That hurts. Sears must have 300,000 employees, too. And now the backstop for the deal is looking...well...weak. A Sears fire sale could have dire consequences in the retail business, not just because of layoffs but also because of co-tenancy clauses, which would snowball into other retailers going dark in malls where a Sears-anchored store might close.

UPDATE: Channel 5 has filed a correction, and, in the interest of accuracy, and I again reprint the story in full, to wit:

We want to make a correction on a story we reported about Sears.

Crains Chicago Business is reporting that rising debt and dwindling cash flows threaten to make this the last Christmas season for Sears. The company faces a short term debt of $1.9 billion.

We incorrectly quoted Sears Chairman Edward Lampert as saying this could be the last holiday season for Sears. Lampert did not make the statement and it was Crains, not Lampert, who drew this conclusion.

Sears says it has more than adequate liquidity and currently expects to completely repay this short-term debt by the end of the month.

We regret the error.

The Crain's story is for subscribers only.

On a completely unrelated note, for you journalists out there, I'm curious: does the AP Stylebook still discourage or prohibit the term "regret the error?" Back in the 80s when I actually knew this stuff, I believe the preferred verbiage was "The AP erroneously reported...."