Not improving: Financial statement reveals grim times for Sears, Kmart

"We grew up with Sears", McGuire said after browsing through the store Wednesday at Northwest Arkansas Mall in Fayetteville. "It would be unusual if it wasn't here". American Apparel filed for bankruptcy protection in November for a second time in 13 months, while teen retailer Aéropostale was bought by a consortium of property companies and investors past year after it filed for Chapter 11.

Sears operates from a significantly smaller space on the first floor of the Mall. Sears Holding's shares fell 12 percent to $7.98 a share on the Nasdaq and trading volume was 4 million shares, more than twice average volume.

If this is the end, it's an Ozymandius-like ending for two onetime retail titans.

Sears has disclosed it may not be able to continue as a going concern despite a turnaround effort that has included selling stores and moving to a membership-focused business model. The troubled US retailer warned it could be headed for bankruptcy if it can't reverse a brutal decline in annual sales and rising losses. While historical performance drives the disclosure, our financial plans and forecast do not reflect the continuation of that performance.

Sears has been a member of the retail dead pool for years, but until this week the company had not openly acknowledged its tenuous existence, said Ken Perkins, who heads the research firm Retail Metrics LLC. "So it's a pretty sad tale, actually, of very bad management over time".

It was once one of the nation's biggest retailers: now, Sears department stores might be on the verge of going out of business.

Once a furniture powerhouse, the struggling retailer posted a loss for the year ended January 28 of $2.22 billion, or $20.78 cents per share, up from a loss of $1.13 billion, or $10.59 cents per share, the year before.

After seven years of not turning a profit, Sears Holdings may be nearing the end of a historic life as an iconic American business. The company has $13.19 billion in liabilities.

The warning comes less than six weeks after the company announced what it called the "next phase of its strategic transformation", in which it hoped this year to reduce costs by $1 billion and cut its debt and pension obligations by at least $1.5 billion.

Sears and Kmart aren't the only stores struggling.

Kmart a year ago closed stores in Ross, Butler, Beaver Falls, Edgewood and Uniontown.

Earlier this year, Sears Holdings also sold the Craftsman brand to Stanley Black & Decker Inc. for $900 million, and it has been reformulating its debts to gain liquidity. There were few shoppers in two of the Sears stores Wednesday.

In North Little Rock, William Scott and his wife, Laurie McGill-Scott, were shopping in a men's clothing aisle. The problem is that these are contingent payments, and the contingency is that if the products don't sell well, Sears doesn't receive payments.

"I think the store will be there for the long haul", Berry said.

Sears, Roebuck and Co. - and its famed catalog - was once an American retailing icon.

  • Zachary Reyes