Sears Holding Corp. shareholders — about as hardy a bunch of investors retail is likely to see — lost some of their nerve this week and hit the sell button.
The ailing retailer’s stock closed down 6.8 percent to $7.42 in heavy trading Friday, having set a new all-time low of $7.08 in midday trading. Over 2.9 million shares changed hands, compared with an average of 1.2 million. The price drop left the stock down 20.5 percent for the week.
That left Sears with market capitalization of just $794 million, a fraction of its $23.4 billion in revenues for the last four quarters.
On Wednesday, debt watchdog Fitch Ratings said projected the retailer would burn through $1.6 billion in cash in 2016 and $1.8 billion in 2017. A spokesman for the retailer said after the Fitch report that, “We believe that we have sufficient resources to support our operations and meet all of our financial obligations.”
Fitch expects Sears’ comparable-store sales fall 8 percent for 2016 and trend down in the mid- to high-single-digit range for 2017.
And last week, Moody’s Investors Service cut Sears Holdings Corp.’s corporate family credit rating to “Caa2” from “Caa1” and questioned the viability of its Kmart business.
Moody’s said its ratings reflected “our view on the uncertainty of the viability of the Kmart franchise in particular given its meaningful market share erosion. The company’s announced closure of 150 stores — 108 Kmart stores and 42 Sears stores — is an effort to reduce store space and increase productivity.”
Chief executive officer Edward S. Lampert, who pieced together Kmart and Sears in a 2005 deal, has been selling off assets to keep the business afloat, shuttling off Lands’ End, real estate and soon Craftsman.
The hedge fund operator, however, is now seen as running out of things to sell and without a viable retail business.