Minneapolis Wilsons the Leather Experts Inc. raised the possibility of bankruptcy on Monday, according to a report in Minneapolis-St. Paul Star Tribute.
The company's independent accounting firm said it has "substantial doubt" about the company's ability to stay in business, according to an annual report filed with the Securities and Exchange Commission.
Wilsons is already closing and liquidating half of its mall-based stores and laying off about 1,000 employees, the report said. It also noted that the company plans to turn the remaining stores into accessory boutiques.
The annual report said that as part of revised credit terms, Wilsons will not be able to borrow from its revolving line of credit until it provides an acceptable business plan and projections to its lender.
Wilsons also was warned a second time that it faces Nasdaq delisting. The retailer said it plans to respond to Nasdaq by the April 30 deadline.