Sears, Kmart says future in 'substantial doubt' as 108 stores close

"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 disclosure comes after more optimistic signs from the company, which has been working on a turnaround under Chief Executive Officer Eddie Lampert. The company said last month it would cut costs by $1 billion and reduce debt and pension obligations by at least $1.5 billion this year.

But times are tough for Sears and Kmart now. It has $4.2 billion in debt, up from $3 billion a year ago.

"Over the long term of things, we've seen retail move from the traditional downtown to suburban location in the malls and then there were strip malls and more recently, there were big boxes in the power centers", said David Black, president and CEO of the Harrisburg Regional Chamber and Capital Region Economic Development Corporation. During the same period in the prior year, the company posted ($1.70) EPS. When Walmart first came in and now they put a lot of people out affecting all these other stores.

The company is also considering selling some of its businesses, such as the Kenmore appliances and DieHard auto battery brands.

They expect tension to mount as Sears approaches the key fourth-quarter selling season amid rising concern about a potential bankruptcy, they said.

Family says missing teen was sexually assaulted on Facebook Live
She told Johnson her daughter had been missing since Sunday and showed him images taken from the video of the alleged assault. The girl's mother, Stacey Elkins, said the video showed her daughter in various stages of undress with several young men.

Johnson, though, believes one avenue for Sears could be returning to its roots as a direct-to-consumer company, only using the internet versus the old catalog. "The Sears Canada operation runs separately from Sears U.S. All our plans regarding Sears 2.0, Initium [its new digital strategy], etc. go on as always".

In recent years, Sears has placed some of its USA stores into a real estate investment trust, put some brands up for sale and repeatedly raised debt from its billionaire CEO Mr. Lampert's hedge fund.

After years of mounting losses, the parent company of Sears and Kmart says there is "substantial doubt" about its financial viability.

Lampert owned close to 10% of the REIT that paid $2.6 billion to Sears in 2015 for its stores that it purchased, of which many were leased back to the longtime retailer. Continued operating losses also could restrict access to new funds under its domestic credit agreement, according to the filing.

Since 2012, Sears' annual revenue has fallen 47 percent to $22.1 billion, and the company has posted $10.54 billion in losses, including $2.22 billion in the year ended January 28.

The company said it could not predict with certainty the outcome of its actions to generate liquidity.

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