Sears Canada Holds Most of The Cash

Joined: 08 Jul 2003 Posts: 6295

Article notes the fact that Sears Canada has most of the cash on Sears/SHLDs balance sheet. Sears Canada has $824 million of the $1.3 Billion in cash on the SHLD balance sheet.

http://online.wsj.com/article/SB125719484732023687.html

Says eddie would have to completely take over of Sears Canada to put that money in his pocket.

Doesn't speak well for Sears US since they more than double Sears Canada sales and yet have less than half the money in the bank.

Joined: 23 May 2008 Posts: 373

Protecting the cash from creditors, taxes and bankruptcys? Way to send it to overseas banks?

Joined: 08 Jul 2003 Posts: 6295

I think Sears Canada has been more profitable over he last decade than Sears domestic. Sears Canada is sorta kinda like a psuedo franchise. Sears probably makes the money off of SC through rights to Craftsman & Kenmore along with putting Sears name on the door.

This is one reason Lampert has made a big push to get full control of SC. This is also why Ackman and Pershing Square want to hold him off because he has his eyes on the prize as well.

Joined: 27 Feb 2009 Posts: 47

The cash in Canada has been generated by Sears Canada. The reason why there's more there than the US is that Eddie uses the US cash to buy back stock.

Based on virtually every financial metric Sears Canada is a much more successful chain than Sears US and Kmart, however, it only account for 12% of the companies sales. Also, Sears Canada has been affected by the economy and the amount of cash flow it produces has also shrunk recently.

Sears now owns about 77% of Sears Canada. It has tried in the past to acquire the whole thing, but has been unable to.

Sears Canada could declare a special dividend, and SHLd would get 77% of the dividend, however, the dividend would also be taxable.

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