A customer leaves the Sears store in Denver
A customer leaves the Sears store in Denver February 26, 2009. REUTERS

Standard & Poor's placed Sears Holdings Corp's credit rating on review for a possible downgrade on Wednesday, saying the retailer's plan to close at least 100 stores may not do much to improve its performance.

S&P currently rates Sears' corporate credit at B, which is five notches into junk bond territory.

Sears shares tumbled on Tuesday after the company said it would close 100 to 120 Kmart and Sears stores and reduce inventory in an effort to cut costs and get rid of underperforming locations.

But S&P, like other analysts, said the store closures may not be enough to improve profitability.

In our view, the company's announcement of 100 to 120 store closures may do little to help its poor performance, the ratings agency said in a statement. We believe that one of the primary issues is that the company has underinvested in its stores base, especially when compared with its peers.

Sears expects to report adjusted fourth-quarter earnings of less than half of those a year earlier due to lower sales, and expects to record a non-cash charge of $1.6 billion to $1.8 billion in the period related to deferred tax assets.

Sears shares closed at $33.33 on Wednesday, down 0.2 percent for the day and 54.5 percent for the year. The stock closed at $45.85 on Friday, the last trading day before company's store closure announcement.

(Reporting By Lauren Tara LaCapra; Editing by Bob Burgdorfer)