Among the most troubled retailers in America, Sears Holdings Corp. (NASDAQ: SHLD) stands out. Its ownership is controlled by a hedge fund manager. It was created in 2004 by the merger of two faltering retail companies — Sears and Kmart. Uniquely, it has elected to close stores by the hundreds. It may be the first large retailer in which shares will soon be worth nothing.

J.C. Penney Co. Inc. (NYSE: JCP) has not closed a large number of stores, despite the fact that the holiday season could sharply set back its chances to survive in its current form. RadioShack Corp. (NYSE: RSH) would like to close 1,100 stores, but its creditors have blocked this.

Sears Holdings announced it would close 235 stores this year. The retailer has made a series of decisions to save itself. It may move some of its locations into a real estate investment trust (REIT). It has spun off Land’s End and chopped its stake in Sears Canada. However, none of these things has reversed diving same-store sales at Sears and Kmart. And that drop won’t end. Many Sears and Kmart stores are old and in need of updating. As almost every industry expert has pointed out, Sears and Kmart compete with powerful rivals such as Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT). Like all big retailers, the online operations of Sears and Kmart live under the shadow of Amazon.com Inc. (NASDAQ: AMZN).

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Sears Holdings lost $548 million in the most recent quarter. Revenue dropped $1.1 billion to $7.1 billion, but most of that was due to the spin out of Land’s End and the change in its ownership in Sears Canada. Nevertheless, Sears Holdings had only $326 million as of November 1, and long-term debt and lease obligations of $2.8 billion. Sears will not be able to pay back that money.

Common shareholders are nearly always the group of investors and bond holders who take the brunt of a restructuring. Sears Holdings will have to restructure, probably sometime in the first half of next year, based on poor holiday sales and financial obligations. The restructuring will press the value of shares down to zero. Count on that.

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