(Chicago Tribune) CIT Group Inc. will no longer provide loans to Sears Holdings Corp. suppliers to finance their shipments to the retailer, a Bloomberg report said, citing two people familiar with the matter.
Sears shares fell 9.7 percent to $29.71 in premarket trading on the New York Stock Exchange. The shares dropped 56 percent last year.
CIT Group, the business lender run by Wall Street executive John Thain, will no longer approve credit for those waiting to be paid for orders delivered to Sears after today, the report said, citing unnamed sources.
At the end of December, Sears had about $4.2 billion of liquidity, including cash balances of about $900 million, Sears spokeswoman Kimberly Freely said in an email to Reuters.
"We disagree with their action, in fact we'd point out that other factors are approving shipments to Sears Holdings and CIT's payables represented less than 5 percent of inventories," Freely said.
The news comes within days of Hoffman Estates-based Sears posting disappointing holiday sales numbers, and announcing the closure of as many as 120 stores.
This is just the latest in a string of bad news for the struggling retailer. Shares down 5.7% pre-market.
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