NEW YORK — Sears, once the monolith of American retail, says that there is “substantial doubt” that it will be able to keep its doors open.
Company shares, which hit an all-time low last month, tumbled more than 5 percent before the opening bell Wednesday.
Millions of dollars have been funneled through the hedge fund of Chairman and CEO Edward Lampert to keep Sears afloat but with sales fading, it is burning through cash. Lampert combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy
According to a regulatory filing late Tuesday, Sears Holdings Corp. lost more than $2 billion last year. Adjusted for one-time charges, its loss was $887 million.
Sears has been selling assets, most recently its Craftsman tool brand. But it says its pension agreements may prevent the spin-off of more businesses, potentially leading to a shortfall in funding.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears said in a filing with the Securities and Exchange Commission.
Sears, which employs 140,000 people, announced a major restructuring plan in February with hopes of cutting costs by $1 billion through the sale of more stores, jobs cuts and brand asset sales.