Shares of Sears Canada (SCC.TO) fell more than 40 per cent after the company announced it is putting itself up for sale after another quarter of precipitous revenue declines.

The retailer has retained BMO Capital Markets and law firm Osler, Hoskin & Harcourt LLP to advise it on strategic alternatives. In its first quarter earnings release, the company said it doesn’t think it will generate sufficient cash flow to meet its obligations over the course of the next year, prompting the move. Revenue fell 15.2 per cent in the quarter, though there was a modest uptick in same-store sales.

Sears Canada has long been grappling with changing consumer behaviours, as online shopping takes a bite out of bricks and mortar retail. Executive Chairman Brandon Stranzl has looked to mitigate declining foot traffic by launching ‘Sears 2.0’, a revamp of the company’s logo and store design. Sears plans to open a further 10 Sears 2.0-format stores by this August, bringing the total count to 14.

The company had earlier attempted to redefine its customer base, with since-departed President Carrie Kirkman espousing a strategy of pursuing ‘Amy’ – a younger, more active shopper than the traditional middle-aged customer base she dubbed ‘Linda’. The company eased back from the push after Kirkman’s abrupt exit last July after only a year on the job.

In spite of the efforts, Sears posted a loss of $144.4 million in Q1, far deeper than the $64.6 million loss in the same quarter a year ago. Margins came under significant pressure, falling 5.6 per cent due to increased clearance sales. The cash burn at the firm accelerated, leaving the company with a paltry $164.4 million in its corporate coffers and with little in the way of wiggle room under its revolving credit facility. The company had expected it would be able to borrow an additional $175 million to help ease its cash crunch, but said in its earnings release that talks with creditors indicate it can likely only obtain $109 million.

The company is also delaying its annual general meeting as a result of the decision to explore a sale, and corporate director Jeffrey Stollenwerck will resign his seat, effective immediately.

Shares of Sears Canada are down 48.7 per cent over the course of the last year.