Sears has filed for bankruptcy protection after buckling under the weight of falling sales and a $134m (£102.1m) debt payment.

The 132-year-old business, which was once the world’s biggest retailer, lodged the Chapter 11 filing in the federal bankruptcy court in New York just after midnight, in the early hours of this morning.

Despite not being able to afford the $134m bill it was due to pay today, Sears said it intends to stay in business.

The retailer plans to keep its profitable stores open, alongside the Sears and Kmart ecommerce sites.

But it will shutter 142 stores by the end of this year, in addition to the 46 closures already planned for next month. It will seek a buyer for its remaining unprofitable shops.

Sears has been struggling to reinvent itself for a number of years amid increasing competition from the likes of Walmart and online titan Amazon.

It warned investors just last year that there was “substantial doubt” it would be able to survive.

The business has lost a staggering $11.7bn (£8.9bn) since 2010, the last year it turned a profit.

Sales have plunged 60% since then and it has closed more than 2,600 stores since 2005 in a desperate bid to adapt to the changing retail landscape.

The company has also been forced into a fire sale of its assets in a bid to raise much-needed cash, including dumping the Craftsman brand it had sold exclusively.

By September, Sears’ market cap had fallen below the $100m mark after its share price plummeted below $1 for the first time in its illustrious history.

Suppliers started to demand that Sears paid cash upfront for the items they were stocking in Sears stores, but creditors instead took their case to the bankruptcy court.

Without a deal in place, Sears filed for Chapter 11 bankruptcy protection this morning.

As of February this year, Sears employed 89,000 staff, down from 317,000 in 2006, shortly after its merger with Kmart.