Credit rating agency New York City-based Fitch Ratings Wednesday cut Hoffman Estates, IL-based Sears Holding Corp.’s credit rating grade from CCC to CC.
Fitch warned that the retailer may not have the cash to operate beyond 2016 and that it expects Sears revenue to fall as much as 9% to 10% this year.
For its part, Sears defended its liquidity and says it disagrees with the Fitch action and the dire prediction for 2016.
The move by the credit rating agency is a reflection of the once-iconic retailer’s steep drops in profitability and bleeding cash. Indeed, that's making it more difficult to buy Sears Holding Corp.’s insistence that things will be okay. It has been selling store leases, spinning off businesses and selling assets to boost capital and cut costs, something it says it may still need to do as it continues to try to turn things around.