Sears, along with most other department store chains that used to serve as mall anchor stores, have been in continuous decline for a decade, with sales and profits dipping lower and lower. On Wednesday, the company released its annual SEC filing and one sentence in particular stands out as cause for concern. In the document, the company said that “substantial doubt exists related to the company’s ability to continue as a going concern.” That’s led some analysts to believe that the end is nigh for the 131-year-old household name.
In the past decade, Sears sales have been halved. And changing dynamics in retail have forced the company to close hundreds of stores, cut its pension obligations, take on debt, and sell some of its best assets. That’s led to ongoing bankruptcy worries for Sears Holdings, the parent company of Sears, Kmart, and Lands’ End, since 2012.
When asked for comment on the company’s worsening financial situation, Sears referred to a blog post on its website where the company says that the grim sentence in its annual filing is “in line with regulatory standards that require management to assess and disclose potential risks the company could face within one year from the reported financial statements.” It goes on to downplay the potential downsides, saying “despite the risks outlined we remain confident in our financial position and remain focused on executing our transformation plan.”