Sears, once the U.S.’ largest retailer, warned Tuesday that it may be unable to continue in the upcoming years after many years of loss and a decline in sales.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” said Sears in an annual report.
The company stated that it’s inability to produce additional liquidity may limit access to upcoming merchandise and its capability to procure services.
The warning came just under six weeks since the company announced a “next phase of its strategic transformation,” during which they hoped to reduce their costs by a whopping $1 billion and decrease debt as well as pension responsibilities by around $1.5 billion.
Sears company shares came down 17.6 percent during premarket trading Wednesday.
The corporation also considered selling sectors of its many businesses, like Kenmore appliances as well as their DieHard battery brand.
History and Issues
Sears’s popular catalogue became an emblem World War II of the consumer explosion throughout the US, however the company has been unable to adjust to changing times and higher competition, especially from companies such as Wal-Mart Stores, Target Corp and more.
The company had lost around $2.22 billion last year, an since the year 2013, accumulated over $7.4 billion in its losses, seeing revenue fall around 44 percent right to about $22.1 billion.
Throughout that time, Sears reduced the amount of US stored by around one third, and reduced the holdings in its Canada branch, in addition to spinning off the chain Lands’ End Clothing.
The total liabilities they have currently is $13.19 billion.
The recent announcement of the company’s possible demise will be a huge blow to hedge fund investors Lambert, who controlled Sears after merging with Kmart in 2004.