Sears Holdings (NASDAQ:SHLDQ) keeps borrowing money as its sales continue to shrink. The company followed a miserable holiday season with a new round of financial moves designed to keep it afloat.

What happened

When a company loses money for six straight years, it's hard to see any good news. Sears CEO Eddie Lampert, however, has been relentless in saying that the chain was on track for a turnaround.

Over the 2017 holiday season that was clearly not the case. Comparable-store sales at Sears and Kmart fell between 16 and 17% during the crucial sales period. That's very bad news for a company that has been selling off pieces of itself in order to keep the lights on.

In addition to reporting its lousy holiday numbers, Sears also borrowed another $100 million and confirmed plans to borrow another $200 million. That, plus the fact that it plans even more job cuts, sent shares in the company plummeting.

After closing the year at $3.58, shares in the company tumbled throughout January to finish the month at $2.57, a 28% drop according to data provided by S&P Global Market Intelligence.

The exterior of a Sears store.

Sears had a terrible holiday season. Image source: Getty Images.

So what

Sears is running out of runway. The retailer has more debt than assets and it's becoming limited in its ability to borrow to fund its losses. Despite that Lampert remains relentlessly optimistic.

"We made significant progress in 2017 through our efforts to reset our cost base and enhance our liquidity, as well as our recently announced agreement with the PBGC to pre-fund our contributions to our pension plan for the next two years," he said. "The initiatives we have announced today build on those achievements and make clear our determination to remain a viable competitor in the challenging retail environment."

Now what

All the optimism in the world does not change reality. Sears needs more customers and that does not appear to be something that is happening. You can't cut and borrow your way to viability.

At some point, people need to show up and shop. Sears has been shedding sales and customers for years and there's no reason to think that will change. That makes all of these financial moves rearranging the deck chairs on the Titanic. You can do that all you want, but the ship will still sink.

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