“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears said in an annual filing with the Securities and Exchange Commission, reports CNBC.
Shares in Sears were already at an all-time low but in early trading, Wednesday, tumbled more than 13 percent to $7.80 a share, according to CNN Money.
Chairman and CEO Edward Lampert’s hedge fund has been keeping the company afloat, infusing millions of dollars into the ailing retail store, but with dismal sales figures, it is burning through the cash.
According to its most recent quarterly earnings statement, Sears lost more than $2 billion last year. With adjusting for one-time charges, the loss came to $887 million. However, over the last eight years, the retailer has suffered losses totaling $9 billion, with liabilities of more than $13 billion. Sears has not turned a profit since 2011.
Sears has been trying to stay afloat
In 2005, Lambert combined Sears and KMart after successfully pulling KMart from the brink of bankruptcy. But Sears has continued to struggle, with revenue declining 12 percent to $22.1 billion last year. Overall, revenue has declined 44 percent since 2012, when the company generated $39.9 billion in sales.
Sears, which has 140,000 employees, has been selling off assets, like its Craftsman tool brand. But with pension agreements in place, this may prevent other sales. This could lead to a shortfall in funding. Sears announced a restructuring plan in February with the hope of cutting costs.
And while it’s reconfiguring its debts, the bottom line is that Sears still needs to get more people coming through its doors or shopping for Sears brands online. That, in itself, will be the hard part.
