Fitch Ratings downgraded its ratings on Sears Holdings Corp. on Tuesday, citing the retailer's weak performance.
The rating agency downgraded Sears Holdings' long-term issuer default ratings to "B" from "B+". The ratings on other debt issued by Sears Holdings and its Sears and Kmart subsidiaries were also downgraded a notch. The rating outlook is negative.
Fitch said the downgrade is due to deterioration of Sears Holdings' top-line growth, with a sharp decline during the first quarter. The company's Sears and Kmart stores continue to underperform their peers and is losing market share. As a result, the company is expected to borrow more to fund its operations, Fitch said.
While Sears Holdings' cash levels are adequate, the "magnitude of decline in profitability and the lack of visibility to turn around operations" are a concern to the agency.
Shares in Sears Holdings were down $1.60, or 2 percent, at $73.53 in afternoon trading.