Dec. 31--Children's clothing company SCI Apparel, formerly known as Sprockets, is suing Hoffman Estates-based Sears Holdings for failing to pay the company for its shipments.
California-based SCI said in a lawsuit filed Monday in Cook County Circuit Court that Sears owes it about $4 million for clothing orders and another $750,000 for fixtures and signs.
According to the lawsuit, Sears would "routinely and deliberately" cancel orders after they'd been placed and then refuse delivery of those items after they'd been produced and shipped. SCI also allowed Sears to without some payments to buy signs that were meant to develop a "store within a store" concept featuring Sprockets clothing. But Sears, the lawsuit says, never developed the concept, and now owes it the $750,000 it previously withheld.
Robert Shipley, partner at Chicago's Shipley Law Group representing SCI, said the incidents occured in 2010 and 2011.
A Sears spokesman said the company does not comment on pending litigation.
Sears has been struggling to cut costs as it shifts to an asset-light business model. The company has lost money for 10 straight quarters -- including $1.5 billion in the 39 weeks ended Nov. 1. The company, which owns the Sears and Kmart retail stores, is closing hundreds of stores to invest in its loyalty program and integrated retail.
ehirst@tribpub.com
Twitter @ellenjeanhirst
