Sears is preparing for bankruptcy as soon as this weekend

Sears Holdings Corp which has been losing money for years has US$134 million in debt due

Sears shares were down 31 per cent at 40.5 cents in afternoon trading in NY, giving the company a market capitalization of $40 million.

ESL Investments, the hedge fund managed by Sears CEO Eddie Lampert, said in a filing last month that the debt coming due was among the obligations creating "significant near-term liquidity constraints" for the company.

Sears has closed almost 400 stores since past year.

The filing could come as early as this week in anticipation of the company's $134 million debt payment due Monday, the Wall Street Journal reported.

The world's largest retailer in the 1960s, Sears sold everything from toys to auto parts to mail-order homes and was a key tenant in nearly every big mall across the United States.

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The news comes after a recent announcement of store closings, including stores at the Mall of New Hampshire in Manchester and the Mall at Rockingham Park in Salem.

Business Insider reported on Wednesday that Sears' top spokesman, Chris Brathwaite, jumped ship just days ago after more than a decade working at the company. CNBC earlier reported that the company was arranging a bankruptcy loan, known as debtor-in-possession financing. Meanwhile, it has shuttered hundreds of money-losing stores, and it promised to close an additional 150 this year. Sears wants to reduce its debt load by 80%, hoping creditors will bite at the chance to make a deal while the company is still a going concern.

"The journey to running a member-centric company on a consistently profitable basis has taken far longer than we expected", Lampert wrote in a lengthy blog post. Lampert bought Sears in 2004 merged it with Kmart, in which he had a controlling stake, the next year. He also called on the company to sell off $3.25 billion in real estate and assets.

The Sears board decided against selling the Kenmore brand to Lampert for $400 million, as he had proposed, after it became clear his broader restructuring plan that he went public with late last month wasn't winning support from creditors, this person said. While much of his focus revolved around Sears' online presence, upkeep on physical stores has diminished.

In the September SEC filing, Lampert's hedge fund said it "must act immediately to have sufficient runway to continue its transformation" if Sears could ever pull off a turnaround.

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