Economy

Sears Canada raises doubt about ability to continue, posts $144.4-million loss

Sears Canada raises doubt about ability to continue, posts $144.4-million loss”

Without an additional cash infusion Sears Canada warned it might not generate enough money from operations to meet its obligations coming due within the next 12 months.

"There are material uncertainties as to the Company's ability to continue to satisfy its obligations and implement its business plan in the ordinary course".

The Sears store at Lansdowne Place in Peterborough.

The Company traces its financial problems of recurring operating losses and negative cash flows from operating activities to 2014 when it began experiencing net losses. "Such conditions raise significant doubt as to the Company's ability to continue as a going concern".

Sears Canada Inc. cast doubt on its ability to continue operating after struggling to cobble together necessary financing.

Shares of Sears Canada are down 48.7 per cent over the course of the past year.

In Tuesday's statement, the company said that it believes "it has made substantial progress in regaining confidence from Canadian consumers as evidenced by its increased sales in some stores". It said it also lacks other assets, such as real estate, that can be monetized in a timely manner.

Spokesman Vincent Power said in an email it's not clear yet whether there will be any layoffs at the company, which had about 16,000 employees as of the quarter ending April 29. That came, however, as the number of its stores dropped.

As a result of the latest developments, Sears is postponing its annual meeting, which was scheduled for Wednesday at 8 am. Sears said it converted four locations last year and will have 10 more stores converted to the new format between June and August this year, bringing the total to 14 by the end of fiscal 2017.



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