Sears could finally be nearing bankruptcy after years of decline

Sears, the struggling department store chain and former iconic American retailer, has reportedly hired an advisory firm to prepare a bankruptcy filing.

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. A boutique advisory firm, New-York based M-III Partners, has spent the past few weeks working on the filing, the Journal reported. Still, the possibility of Sears' final end has loomed for months, and people familiar with the arrangement told the Journal that Sears is still weighing other options. Neither Sears nor M-III Partners immediately returned requests for comment.

Sears' stock traded down nearly 32 percent in premarket trading Wednesday.

The 125-year-old retailer has taken a particular hit as brick-and-mortar stores around the world have struggled to compete with e-commerce giants and maintain massive showrooms. But if Sears is now in touch with banks to secure the financing needed for a bankruptcy filing, as CNBC reported Wednesday morning, that could send the surest signal that such a move may not be far off.

On Tuesday, Sears also brought in restructuring expert Alan Carr as a company director, broadening the six-person board to seven and adding further guidance on how to steer a large company through a bankruptcy filing.

Just weeks ago, Sears' chief executive Eddie Lampert devised a last-minute plan to save the retailer. The company has a total of about $5.6 billion in outstanding debt and is down to about 820 Sears and Kmart stores. When Lampert took over as head of the company five years ago, there were 2,000 stories. Lampert bought Sears in 2004 merged it with Kmart, in which he had a controlling stake, the next year.

Lampert — Sears' largest shareholder and creditor, as well as owner of the hedge-fund ESL Investments — asked creditors last month to refinance $1.1 billion in debt before the Oct. 15 payment, according to a filing with the U.S. Securities and Exchange Commission. He also called on the company to sell off $3.25 billion in real estate and assets. Those include Sears Home Services and the company's flagship Kenmore brand, which Lampert offered to purchase in August for $400 million.

Lampert himself has had a controversial tenure as chief executive. While much of his focus revolved around Sears' online presence, upkeep on physical stores has diminished. Lampert's strategy has often involved keeping Sears afloat with loans.

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.