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The ill-fated Sears and Kmart borrows $500M from CEO, sells off stores to stay afloat

(BUSINESS NEWS) Sears and Kmart have flailed for years like a fish out of water, but they’re not giving up quite yet – here’s what they’re doing to survive.

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The ebb and flow of big box retailers

Kmart used to be the big box store of choice, and Sears was the go-to for everything from clothes to lawn mowers to dishwashers. But those days are long gone. I struggle to remember the last time I even saw Kmart, much less shopped there.

Sears Holdings, owner of Sears and Kmart, may fancy itself a retailer, but in fact, hasn’t turned a profit from retail sales in years, and has accumulated billions of dollars in short and long term debt.

Between 2012 and 2014, Sears Holdings accumulated no profit whatsoever. It was only in 2015 that the company began to rake in revenue again – not from retail sales, but from selling its real estate.

Another big boy loan

Just last week the company announced that they had secured a letter of credit of between $200 million and $500 million that will allow the company to borrow from their CEO’s hedge fund, and its affiliates.

Now, the company is asking their CEO to front them $500 million to keep them afloat while they sell off even more of their store locations.

They already plan to sell 46 stores for around $321 million. And unless there’s some sort of miraculous jump in retail sales, they’ll probably have to sell even more stores to make up the remaining $179 million.

Besides selling their stores outright, Sears has also been attempting to fill the empty space where merchandise used to be by renting it to other companies. Sections of Sears stores have been rented to retailers like Dick’s Sporting Goods and Whole Foods.

“…committed to restoring profitability”

While Sears Holdings CEO and chairman Eddie Lampert insists that they “remain fully committed to restoring profitability to our Company,” it is abundantly clear that the only survival strategy the company may have left is to slowly dissolve itself and hope for maximum profits from selling their massive, sprawling stores, which are often located in or adjacent to shopping malls.

#bigboyloan

Ellen Vessels, Staff Writer at The American Genius, is respected for her wide range of work, with a focus on generational marketing and business trends. Ellen is also a performance artist when she's not writing, and has a passion for sustainability, social justice, and the arts.

Business News

Ending a dismal year, Samsung says goodbye to CEO

(BUSINESS NEWS) Following a tumultuous year, Samsung now must face their CEO, Kwon Oh-hyun, stepping down.

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Among exploding phones, recalled washing machines and an indicted former chairman, Samsung has had a rough year. Just as they start to get back on track, they have one more crisis to deal with.

Kwon Oh-hyun, Samsung CEO, has officially announced his departure.

In a letter to the employees, Kwon announced his plans to leave the company by March of next year. His words touch on all of the typical sentiments, like that he “had been thinking long and hard about (leaving) for quite some time,” and that he wants to “move on to the next chapter in his life.”

What Kwon doesn’t make clear are his exact reasons for leaving.

He mentions that Samsung is in an “unprecedented crisis inside and out,” without sharing any specifics. Via his own words, Samsung needs to reshape their company to keep up with the ever-changing IT industry.

Kwon believes that young, fresh leadership could be the answer that Samsung needs.

Though Kwon’s departure may seem like another hit for the company, it could be a new chapter for Samsung as well.

And it is a change they desperately need. Recently, Samsung has made the headlines with scandal after scandal.

Earlier this year, Jay Y. Lee, former Vice chairman, was found guilty on multiple charges of bribery. The charge, which Lee is now serving five years in prison for, also resulted in the impeachment of South Korean President Park Geun-hye.

Samsung also lived through two major recalls this year. They officially took the Galaxy Note 7 off of the market after various accusations of batteries overheating led to fires.

Samsung also recalled 2.8 million washing machines because their “violent vibrations” caused some users to be injured.

Major scandals like these are enough for any company to flop. However, Samsung is still in the game. Kwon’s letter calls for the company to start anew, which is exactly what they need to do to stay afloat.

Of course, creating devices that do not cause injuries and fires will be a start. In addition, new leadership will keep the company relevant and hopefully, revive their reputation.

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Business News

Identity-protecting roller stamps are a must for any office

(BUSINESS NEWS) Your identity is one of the most valuable things, that’s why Guard Your ID has created a stamp for when shredders won’t work.

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The massive Equifax hack made nearly everyone feel vulnerable, but the truth is that every day we knowingly engage in activity that puts our privacy at risk.

Just think of how many times you give up your telephone number when signing up for a new magazine subscription. Or the numerous times you thoughtlessly threw away mail containing confidential information.

There are so many opportunities to accidentally reveal private information but luckily, there are an equal number of ways to prevent it. Though you may think that identity theft could never happen to you, it’s better to be safe than sorry.

Of the various tools invented to help you protect your identity, one of the newest is actually very simple. The company Guard Your ID has recently introduced privacy protection rollers and stamps. These gadgets are simple, quick and effective to help shield your identity on virtually anything.

The oil-based ink works on both glossy and non-glossy surfaces without smearing or rubbing off. These stamps work by creating an encrypted pattern which makes text unreadable.

Though shredding is another effective way to protect your identity, the rollers and stamps are more environmentally friendly. At some centers, shredded paper cannot be accepted as recyclable material. In addition, you can stamp more things that you can shred.

For example, you may want to cover up a label on a prescription bottle. The protection stamps are more versatile than shredding, and also more cost effective.

An Identity Protection Stamp can be purchased for under $20 and has a shelf life of 2-3 years. A wide format roller is also available for larger surfaces. In addition, refillable ink can be bought for the wide rollers.

It may seem like a nuisance to start stamping every label, bank statement and mail that contains any piece of private information on it, but in the end, it may be worth it. Just think of how much time you will spend freezing your accounts and recovering your identity if it is stolen.

It may seem silly, but today even a simple stamp goes a long way in protecting your identity.

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Business News

Zuckerberg used VR to highlight hurricane Maria destruction

(BUSINESS NEWS) Mark Zuckerberg tapped into his Occulus VR conference abilities to highlight the damage Hurricane Maria did to Puerto Rico.

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We know at this point that Puerto Rico was devastated by Hurricane Maria, but it can be difficult to understand the true extent of the damage without being there. We’ve seen some images and some video but Mark Zuckerberg is taking it to another level.

In a new partnership with the Red Cross, Zuck is taking to virtual reality to assist relief efforts.

In a presentation from Facebook’s Silicon Valley headquarters, Zuckerberg took Facebook users on a 360-degree tour of the hurricane destroyed island, using a combination of artificial intelligence and satellite imagery to determine areas with the most significant need.

Explaining his use of technology and its purpose, Zuckerberg said, “We use artificial intelligence to build what we call ‘population maps’ so you can look at satellite imagery of an area and get a sense of where it is that people actually live and the density of different places and where there’s infrastructure going to in those places. That’s going to help the Red Cross figure out where people are who need help.”

He also went through Facebook’s plans to restore internet connectivity on the island, which has been struggling to get power and resources back after the category 3 hurricane slammed the island with 125 mile per hour winds last month.

Zuckerberg said his company has already sent employees to the island to investigate damage and get networks working properly.

Speaking on the importance of internet and its integral role in the island’s ability to communicate domestically and abroad, he said, “When you are in the middle of a disaster like this, it’s really important that people have access to the internet. But it’s also important so that when relief workers go down there, they can coordinate with each other and know where people need help.”

There has been a bit of blowback from the VR tour though. A few of Zuck’s critics are calling him “tone deaf” saying that having the avatar chit-chat in front of flooded and destroyed home made it seem like he was cashing in on a natural disaster to plug his Occulus brand.

While his intentions were probably in the right spot, no matter how it came off, this is the first time that VR has been used for disaster coverage and we’re sure it won’t be the last.

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