Sears has a bigger problem than plunging sales: dwindling inventory.
The companies that supply Sears with the TVs, toys, and clothing for sale in its stores are growing 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 that's trying to avoid a possible 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 cut back its orders. One World Technologies cited concerns about the Sears' ability to pay its bills, according to a lawsuit filed by Sears on Monday.
Sears says it has always paid its suppliers on time and claims One World Technologies is trying to take advantage of "negative rumors" and media reports about Sears' viability to change the terms of its contract.