It looks like Sears may finally be giving up the ghost — the former retail giant warned Tuesday that it may no longer be possible to continue as a going concern.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears said in the annual report for the fiscal year that ended Jan. 28.
Sears has seen its fortune fall off precipitously over the last few years as the firm has moved to spin off some its more high-value stores into a real estate investment trust and sell off some of its still-valuable brands. Sears has also raised debt from its CEO Edward Lampert’s hedge fund to deal with the slump.
The firm has also pledged to cut costs by $1 billion and reduce debt and pension obligations by at least $1.5 billion over the course of 2017.
And while Sears thinks it might have improved liquidity enough with the $900 million sale of its Craftsman tool brand to power tool maker Stanley Black & Decker Inc. to keep the doors open for the rest of the year — after that, things look less certain.
Sears’ current borrowing clocks in at $4.16 billion. It has said it plans to find ways to unlock value across a range of assets.