Further doubt has been cast over whether struggling Sears Holdings Corp can avoid liquidation after the US department store retailer lowered its holiday revenue forecast.
According to updated documents filed with a US federal bankruptcy court seen by Bloomberg, Sears is expecting Christmas week sales of US$215m and $1.69bn for the two month period from 15 October through to 12 January.
In a bankruptcy filing on 15 October, the retailer had forecast revenues of $241m for the week of Christmas and $1.93bn for the two month period. Sears is also anticipating negative operating cash flow in the weeks leading up to Christmas, and net cash flow before financing of minus $434m for the 13 weeks to 16 February, according to Bloomberg.
The downgrade just adds to the financial challenges the retailer is currently experiencing. Sears filed for bankruptcy in October and announced the closure of 142 of its stores. It said at the time it was rolling out a series of actions to position it “to establish a sustainable capital structure, continue streamlining its operating model and grow profitably for the long term.”
Last month, the retailer secured a $350m court-approved loan just ahead of a bankruptcy hearing on its financing arrangements.