Sears is suing another tool vendor it says is cancelling its contract after 50 years
In a lawsuit filed this week, the retailer says Illinois-based Ideal Industries repeatedly assured Sears that it would extend its supplier contract beyond April, when it was set to expire, then on April 28 "abruptly" informed Sears that it would stop supplying the company with tools.
The move ended a 50-year relationship between Sears and supplier Western Forge, which was acquired by Ideal in 2010. The Chicago Tribune first reported on Sears' lawsuit.
The suit claims that under Sears' agreement with Ideal, the supplier must continue to provide Sears with products for six months past the contract expiration under a mandatory transition period.
Sears claims that Ideal only fulfilled purchase orders for another month, however, leaving the retailer scrambling to find another supplier. Sears says it will run out of certain Craftsman tools if supplier Ideal Industries doesn't resume filling orders.
Ideal "has left Sears without the ability to sell certain of its Craftsman brand tools without supply interruption and constitutes a material breach of the agreement," Sears says in the lawsuit. Sears is demanding that Ideal continue to supply products for another five months.
This is the second time in a month that Sears has sued a top tool vendor.
In May, the company filed a lawsuit against One World Technologies, a subsidiary of China-based Techtronic Industries.
The lawsuit claimed that One World, which also manufactures Craftsman tools, threatened to cancel its contract with Sears because of concerns about the retailer's financial stability unless Sears agreed to cut back its orders.
In a blog post published prior to the lawsuit, Sears CEO Eddie Lampert blasted One World, saying it was trying to "embarrass" Sears and "take unfair advantage" of the retailer by changing the terms of its supplier agreement or threatening to cancel its contract with Sears altogether.
Sears has since said that it resolved the conflict and would be continuing its relationship with One World. The retailer provided no further details on the resolution.
The lawsuits come after Lampert told the Chicago Tribune in early May that several vendors had been treating Sears like a "pariah" and questioning its ability to pay for orders. He blamed the media for the vendor problems.
"There are a lot of articles that are speculating, and there are elements of truth, but they're certainly designed to scare people," he said.
In March, Reuters spoke to three suppliers that were cutting back shipments, refusing bigger orders, or demanding earlier payment from Sears.
Sears is under pressure from years of plunging sales, which have been cut in half since 2007, and it has lost more than a quarter of its executive team in the last five months.