Sears Tries to Calm Supplier Jitters. Retailer accelerates payments; weak results make it harder to insure orders

The Wall Street Journal reports:

Sears Holdings Corp.’s weakened financial position is putting stress on its supply chain.

Suppliers of tools and other goods have begun asking for sweetened payment terms to compensate them for the risk of shipping to the troubled retailer, people familiar with the situation said.

Sears has offered to pay some vendors within 15 days, faster than its normal terms of up to 60 days for suppliers of apparel or hard goods, in return for a discount of around 3% to 5%, one of the people said.

The faster payments tie up more of Sears’s cash, increasing the risk and complexity of basic functions needed to keep its business going. It has little choice but to bear those costs, however, after a dismal holiday season that rattled its vendors.

Will this happen to your friendly , local municipality sometime in the future?