American Sears in major financial difficulties

American Sears in major financial difficulties

In its latest annual report filing, American department store chain Sears doubted its ability to keep operating, which sent the stock plummeting.

 

Huge debt

Sears’ stock value dropped 15 % after the report, because of concerns it would not be able to survive. The company did try to alleviate worries, saying that its recovery plan, which helped boost share price 60 % since February, will help it survive for at least another twelve months.

 

The chain of department stores will continue to lower debt, which is at 10 billion dollar (9.2 billion euro), and cut costs. CEO Eddie Lampert has been the main investor, putting up 1 billion dollars (920 million euro) over the past year alone, but he also hopes to cut 1.5 billion dollars (1.4 billion euro) in costs and pension costs, on top of store closures and the sale of real estate and divisions.

 

A spokesperson says these incisive measures are necessary to improve the company’s ability to survive and keep 140,000 people employed. Rating agency Fitch Ratings said last year that Sears was at risk to go bankrupt.