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Sears shares sink after filing raises concerns about its ability to ‘continue as a going concern’


Sears Holdings Corp.

SHLD, -0.87%

shares sank 15.4% in Wednesday premarket trading after the struggling retailer warned that it has “substantial doubt” that it would be able to “continue as a going concern” if its turnaround plan failed. Sears announced a $1 billion restructuring effort in February that includes staff cuts and store closures. In its 10-K filed Tuesday, it said it is also exploring options with its remaining assets, including the Home Services business and the Kenmore and DieHard brands. “We believe that the actions discussed above are probable of occurring and mitigating the substantial doubt raised by our historical operating results and satisfying our estimated liquidity needs 12 months from the issuance of the financial statements,” the company said. “However, 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 currently planned.” Sears reported outstanding borrowings of $4.2 billion as of Jan. 28, 2017, up from $2.98 billion last year. Sears shares are down 38.6% for the past year while the S&P 500 index

SPX, -1.24%

is up 14.4% for the period.

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