"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 ended January 28.
In Canada, Sears operates separately from its USA parent but is still controlled by hedge fund manager Edward Lampert, who is chairman and chief executive officer of the US chain. Last year, almost half of the company's lines in its four factories were producing for Sears.
Sears has upped its presence online, but is having a hard time disguising its age. The dip was largely due to the reduced number of both Sears and Kmart full-line stores, which led to a revenue loss of $596 million.
"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. Sears would regain its health by closing struggling stores and focusing instead on profitable sales, he wrote.
Sears Holdings Corp's disclosure that it could lack the financial strength to continue as a going concern is turning attention to the key difference maker for any cash-strapped retailer: vendors.
Sears Holdings Corp Last issued its quarterly earnings results on Mar 9, 2017. The company plans to use the profits from that sale to shore up its pension plan, which Sears acknowledges ties up a significant portion of the company's cash on an annual basis. During that period, Sears cuts its store count in the U.S.by close to a third, lowered its holding in Canada and spun off clothing chain Lands' End.More news: Rajnath Singh congratulates Nongthombam Biren Singh
At this point, the stores are doing all they can to stay afloat but have expressed "substantial doubt" about chances of survival.
The money troubles at Sears are no secret - it's lost more than $10 billion since 2011, including $2 billion a year ago.
The company that owns Sears and Kmart informed the government on Tuesday it has "substantial doubt" about whether the stores can continue.
Lampert owned almost 10 percent of the REIT that paid Sears $2.6 billion in 2015 for stores that it purchased, many of which were then leased back to the retailer.
But in a filing on Tuesday it also makes clear that additional asset sales could prove problematic. Continued operating losses also could restrict access to new funds under its domestic credit agreement, according to the filing.