Sears Holdings, the parent company that owns both Kmart and Sears, on Tuesday announced a bleak outlook and expressed “substantial doubt” that it will survive, but at least for the present it doesn’t appear that the four Kmart stores in the U.S. Virgin Islands are facing imminent closure.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears said Tuesday in its annual report for the fiscal year ended Jan. 28.
The company, which hasn’t turned a profit since 2011, now has about $13.9 billion in liabilities.
After Tuesday’s report caused shares of the company’s stock on Wednesday to drop more than 17 percent in value, Sear Holdings moved to reassure investors that despite the gloomy language in the annual report it believes it is on course to turn the struggling business around.
“It is very important to reiterate that Sears Holdings remains focused on executing our transformation plan,” Chief Financial Officer Jason Hollar said. “This is evident in the decisive actions we have taken in recent months. Despite the risks outlined we remain confident in our financial position.”
At the start of 2006, the first year after the merger of the Sears and Kmart chains, Sears Holdings had 3,400 U.S. stores. That number is now down to 1,400, and the company announced this winter it is closing another 150.
But the list of stores slated for closure this year is scattered across the states; none are in the Virgin Islands.
At the four territory Kmarts – at Sunny Isle Shopping Center and Sunshine Mall on St. Croix and Tutu Mall and Lockhart Gardens Shopping Center on St. Thomas – no one was available Wednesday afternoon to discuss the future of the stores. But employees at the stores, speaking anonymously, all said they had heard no suggestion that the stores were in any trouble.
One pointed out that the Kmarts on the two islands are in a very different situation than those stateside. Most Sears and Kmart stores in the state have no lack of competitors, with dozens of chains in close proximity, often in the same malls and shopping centers, and online retailers eating into their business. On the islands, Kmart is practically the only game in town for a wide selection of general merchandise.
“We don’t have the competition,” the employee said.