"Substantial doubt exists related to the company's ability to continue", Sears Holdings said in a filing with the Securities and Exchange Commission.
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.
A 10-k document filed yesterday included a going concern notice, even though it added its revival strategy unveiled in February to cut stores and reduce staff would be sufficient for a year at least.
But times are tough for Sears and Kmart now.
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".
Jason Hollar, Sears' chief financial officer, said in a Wednesday blog post that Sears' move to raise capital in recent months is helping strengthen the company's balance sheet. The company has struggled for years with weak sales. When Walmart first came in and now they put a lot of people out affecting all these other stores.
Going forward, the company expects adjusted EPS of $1.94 - $2.13 on revenue of $1.2 - $1.26 billion.
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At this point, the stores are doing all they can to stay afloat but have expressed "substantial doubt" about chances of survival. Sears, like many department stores, has been thwarted by a new consumer that has ripped up the decades-old playbook that the industry has relied upon.
Sears Holdings Corp (NASDAQ:SHLD) last announced its earnings results on Thursday, March 9th.
Landlords are now looking at splitting up Target locations for multiple retailers, rather than replacing Target with just one merchant, although chopping up the space for multiple players can be costlier, said consultant Mr. Williams.
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.
Continual operating losses could also restrict its access to funds under its credit agreement, said the filing.
In March, Sears Holdings sold the Craftsman tool brand for $775 million: it had long-term debt of more than $4 billion as of earlier this year.
But it added that "we cannot predict, with certainty, the outcome of our actions to generate liquidity, including the availability of additional debt financing, or whether such actions would generate the expected liquidity as now planned" and a failure to a failure to generate additional liquidity "could negatively impact our access to inventory or services that are important to the operation of our business".