Sears flags going concern doubts
Retailer Sears Holdings Corp , which has struggled with years of losses and declining sales, warned on Tuesday about its ability 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 ended Jan. 28. (http://bit.ly/2mRUcce)
Once the largest U.S. retailer, Sears has spun off some of its stores into a real estate investment trust, put some brands on sale and repeatedly raised debt from billionaire Chief Executive Edward Lampert's hedge fund to cope with the slump.
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.
Sears said on Tuesday actions taken during the year to boost liquidity, including the sale of the Craftsman tool brand to power tool maker Stanley Black & Decker Inc in a $900 million deal, could mitigate the going concern doubt and satisfy its capital needs for the current fiscal year.
However, the company said it could not predict with certainty the outcome of its actions to generate liquidity.
Sears, which had total borrowings of $4.16 billion as of Jan. 28, said it would continue to explore ways to unlock value across a range of assets.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta)