Sears admits there's 'substantial doubt' it can stay in business
Kmart, Sears face ‘substantial doubt’ about finances as losses grow.
Sears, the iconic department store chain across the suburbs of the U.S, may be on the verge of going out of business, taking Kmart with it.
After years of mounting losses, the parent company of Sears and Kmart (with whom it merged in 2004) says there is “substantial doubt” about its financial viability.
As many other traditional retailers, Sears is struggling to keep pace in the era of online shopping.
The sales dip at Sears stores was the worst among the top 250 retailers tracked by eMarketer as of November, as reported in the USA Today.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears Holdings said Tuesday in its annual report.
The biggest question, the company said, is whether it can raise enough cash to stay afloat. It has $4.2 billion in debt, up from $3 billion a year ago.
Sears Holdings is the parent of Kmart and Sears, Roebuck, & Co. It was formed after the March 2005 merger between the two companies, both of which are American retail icons dating back to the late-19th century. The decline of suburban shopping malls and the rise of online retail have dealt a double-whammy to the businesses. In recent years, the parent has shuttered dozens of stores and sold off some of its brands, as reported in The Washington Post.