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The future of Sears Canada is very much in doubt.
The retailer, which has been a Canadian staple for years, unveiled its first quarter financials numbers on Tuesday and they don’t look good.
SEARS closing more stores. Sad, don't wanna see the catalogue go! Be honest, 1st page you turned to as a kid? Tom=lingerie / Scott=lingerie pic.twitter.com/ChCJQx3y8b
— 94-3 The Drive (@943TheDrive) June 7, 2017
Revenue for the company was $505.5 in the first quarter of 2017, which is a decline of 15.2% from the same period last year.
In total, the company posted a net loss of $144.4 million, which equals out to $1.42 per share.
The company’s cash assets were $164.4 million at the end of the first quarter, compared to $235.8 million when the first quarter began.
Sears Canada had nearly twice the amount at the end of 2016’s first quarter, when they posted $349.8 million in cash assets.
“The Company continues to face a very challenging environment with recurring operating losses and negative cash flows from operating activities in the last five fiscal years, with net losses beginning in 2014,” said a statement from Sears Canada. “Such conditions raise significant doubt as to the Company's ability to continue as a going concern.”
Sears Canada had expected to be able to borrow up to $175 million, but that total has been reduced to $109 million before transaction fees.
That, combined with the company’s lack of other assets, mean there are material uncertainties as to whether Sears Canada can continue to satisfy its obligations and operate.
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.”
The start of 2017 didn’t show much evidence of that, but only time will tell if the downward spiral will continue for Sears Canada.
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