Sears has a bigger problem than plunging sales: dwindling inventory, according to a Business Insider analysis yesterday. The companies that supply Sears with the TVs, toys and clothing in its stores are increasingly concerned about the retailer's ability to pay its bills, and some are cutting back on shipments to stores as a result. That means Sears and Kmart stores are receiving less merchandise to sell, which is a grave problem for a company trying to avoid bankruptcy by reversing years of sales declines. Sears said this week that One World Technologies, one of its top tool suppliers, threatened to cancel its contract with Sears unless the retailer agreed to reduce its orders. Last week, Sears CEO Eddie Lampert said that several vendors had been treating Sears like a "pariah" and questioning its ability to pay for orders "because there are a lot of articles that are speculating, and there are elements of truth, but they're certainly designed to scare people." Suppliers have been worried about Sears' financial health for a while, but their concerns accelerated in the last half of 2016. The problem has been underreported because few suppliers are willing to discuss the matter openly for fear of triggering a Sears bankruptcy or disrupting their relationship with the company. But the issue is readily apparent in stores, where empty shelves and barren wall displays showcase the effect of the company's declining inventory.
