After seven years of not turning a profit, Sears Holdings may be nearing the end of a historic life as an iconic American business.
The warning is the latest stumbling block for the Kmart and Sears owner, whose stock had dropped 39% over the past year through Tuesday's close.
The future of Sears and Kmart is up in the air.
Sears Holdings Corp. said late Tuesday it lost more than $2 billion a year ago, and its historical operating results indicated doubt about the future of the company that started in the 1880s as a mail-order catalog business.
Sears Holdings Corporation (NASDAQ:SHLD) has tumbled 1.95% during the past week, however, the bigger picture is still very bullish; the stocks have advanced and posted positive gains of 20.03% in the last four weeks.
Shares of Sears plunged almost 13 percent Wednesday morning after the announcement.
Is your local Sears or Kmart among 150 stores to be axed? Sears Holdings has also borrowed money from its chief executive, hedge fund manager Eddie Lampert, and refinanced much of its debt.
Mr. Lampert owned almost 10 per cent of the real-estate investment trust that paid Sears $2.6-billion for stores that it purchased, many of which were then leased back to the retailer. In the following month, the retailer initiated a restructuring program aimed at cutting $1 billion in costs annually and reducing debt by $1.5 billion helped by proceeds from the sale of one of its most valuable brands, Craftsman tools to Stanley Black & Decker.
"We acknowledge that we continue to face a challenging competitive environment", the company said. "But in order to meet the objective of returning to profitability, we have to make tough decisions and will continue to do so, which will give our better performing stores a chance at success".
Sears Holdings sales have been imploding for years now, and the company has now lost a total of nearly $10 billion in the last six years.
Both Sears brands have been crippled by same-store sales losses, so neither Kmart nor Sears has been a pillar for the company.
He cited a US$1 billion increase in liquidity from a new secured loan facility and a new asset-based loan that provided US$250 million more in "financial flexibility".
For Sears to survive, Perkins believes it would need to do so as a company running maybe 200 stores.
Sears has five stores in Western Pennsylvania, including a North Hills location at Ross Park Mall. Last year, it reported losses of $2.2 billion. Sears Holdings Corporation (NASDAQ:SHLD) shares tanked -0.87% to $9.10 on Tuesday. Annual EPS Growth of past 5 years is 6.50%.