Published
Mar 23, 2017
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Sears is drowning in "going concern" SEC filing uproar

Published
Mar 23, 2017

Sears is now doing some damage control, following its recent annual report SEC filing released earlier this week, after disclosing its doubt that the company can continue operating as a "going concern."


The statement sent Sears stock in a dive, falling 12.3% after the SEC filing. To quell the situation, the aging American retailer's CFO Jason Hollar authored a blog post that explained how the filing was a mandatory disclosure and that the company is required to share potential risks which may arise in the upcoming fiscal year.

Hollar then tried to mitigate this bold statement further by saying that Sears is still a “viable business that can meet its financial and other obligations for the foreseeable future." He noted that while the company's history required that disclosure, futures and forecasts are showing a healthier company.

It is not news that Sears is struggling. The company is currently in the process of a massive restructuring where it will implement cost cutting strategies for both its Sears and Kmart brands. These strategies involve a target of a $1 billion dollar debt saving plan that includes reducing the company's pension obligations, or what Hollar noted as being focused on increased "financial flexibility."

Also on the horizon for Sears is a potential deal to sell its Kenmore appliance brand and its Die Hard car battery brand to increase liquidity. These potential sell offs join a deal already in progress to sell its Craftsman tool brand to Stanley Black & Decker for $900 million cash.




 

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