Kmart reported close to bankruptcy filing

NEW YORK (CNN) -- Discount chain Kmart Corp. could make history on Tuesday, becoming the largest U.S. retailer to file for bankruptcy.

The cash-strapped company is on the brink of collapse and could make a voluntary filing for bankruptcy protection as early as Tuesday morning in Michigan, industry analysts say.

But the No. 3 U.S. retailer is still looking for ways to avoid filing. It is considering closing several stores, according to analysts.

MORE STORIES Fleming halts Kmart food shipments

The Michigan-based company is also hoping to negotiate $3 billion in new financing from a bank group led by J.P. Morgan.

The New York Times reported that Kmart's board met on Monday night to put the finishing touches to some debtor-in-possession financing, which would allow the company to continue operating while restructuring.

But Kmart's shelves are already becoming empty.

Kmart's plight worsened on Monday when its grocery supplier, Fleming Companies Inc., said it had stopped shipping goods to Kmart, its biggest customer, after the struggling discount retailer failed to make a scheduled payment.