Like a chess player who realizes their only chance of not losing is a tornado that whisks the table away, Sears Holdings is now making it clear to investors that there’s a good chance the company won’t be around much longer.

“Our historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern,” writes the company in its latest annual report, adding that its current plans will keep things afloat for the coming year, but that it can’t predict the longterm likelihood of still being financially solvent.

Some of these concerns are issues that we’ve discussed on the site, like the possibility that vendors may not want to serve Sears, and the big cash infusions that the company owes to its pension fund, even though newer employees aren’t eligible for the pension plan.

In other parts, the list of risk factors for Sears Holdings reads like it was compiled by Captain Obvious. “If we are unable to compete effectively in the highly competitive retail industry, our business and results of operations could be materially adversely affected,” the document notes.

Sears Holdings’ competitors, especially Kmart’s competitors, are opening and remodeling shiny new stores, while Kmart seems to be waiting around for leases to expire rather than actually fixing up its stores.

Speaking of leases, that’s another major concern for Sears Holdings: Its deal to raise cash by selling stores to an affiliated real estate investment trust may hurt the chain in the end. The cash is useful now, but the trust has the right to “recapture” stores currently leased to Sears and rent it out to more profitable tenants.

If Sears is closing stores anyway, that seems like a fair exchange, doesn’t it? The problem is that the recapture process turns off customers, as one of our own staffers learned when she visited a Sears department store that was in the middle of consolidating to one story, but looked like it was about to close instead.

While Sears Holdings sold off the Craftsman tool brand to raise operating cash, another future concern that the company raises is that the sale may not be as profitable as anticipated if the Craftsman brand doesn’t sell as well as anticipated in the future.

For 15 years after the sale, Sears Holdings will be allowed to make and market its own Craftsman tools without paying royalties, and the new owner will pay Sears a set percentage of its sales. The problem is that these are contingent payments, and the contingency is that if the products don’t sell well, Sears doesn’t receive payments.

“These contingent payments are dependent upon Stanley successfully maintaining and increasing market demand for, and sales of, Craftsman-branded products, and there can be no assurance regarding the amount or timing of any such contingent payments,” the report explains.

[via Reuters]

Update: Sears Holdings fired up its blog this afternoon to explain how it’s on its way back to profitability, and totally not doomed.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.