Sears Canada may be following in the footsteps of its former U.S. parent company, Sears Holdings. The Canadian company says it has “significant doubt” of its ability to continue operations, according to CNN. Sears Holdings used similar language regarding its ability to stay out of bankruptcy in its annual report, released in March.
On Tuesday, the Canadian retailer, which has more than 200 stores and about 17,000 employees, according to CNN, reported revenue of $505.5 million in the first quarter, a decline of 15.2 percent from the previous year.
In its quarterly report, the company also noted net losses began in 2014 for the company, just two years after it had separated from Sears Holdings. While Sears Canada says it has seen early successes, to remain operational is dependent on the “ability to obtain additional sources of liquidity in order to implement its business plan.”
In the report, the company postponed its 2017 annual meeting of shareholders, which was previously scheduled for June 14. A new date has not yet been made public.
Although Sears Canada and Sears Holdings are separate companies, the news will also impact the U.S. retailer, according to CNN. Sears Holdings owns 12 percent of Sears Canada shares. Plus, “Sears Holdings CEO and principal shareholder Eddie Lampert owns 45 percent of Sears Canada, both personally and through his hedge fund,” reports CNN.