Fossil (FOSL - Get Report) could become just that, hints one Wall Street analyst.

"An event horizon, commonly associated with black holes, is the point of no return where time stands still and takes another dimension. We wonder if we've reached this tipping point [with Fossil] following the 10-q release," wrote Macquarie Capital analyst Laurent Vasilescu on Monday about the struggling watchmaker. The analyst voiced concerns about Fossil being able to hold onto key license agreements, notably one with Michael Kors (KORS) that represents 22.7% of its annual sales. If Fossil doesn't meet certain sales requirements in 2018, Michael Kors could terminate the license agreement in 2019. 

Vasilescu also called out Fossil's dwindling cash pile as a major worry. 

To be sure, Fossil is in a bad place right now. 

The company is fresh off reporting a net loss of $1 a share for the period ended April 1, steeper than the loss of 27 cents a share analysts surveyed at Factset expected. Revenue tallied $581.8 million, lower than Wall Street's estimates for $591 million.

Shares of Fossil crashed 23.2% last week following the release. 

In America, sales plunged 17%, while watch sales dropped 9%, leather items fell 21% and jewelry slipped 12%. In its retail business, same-store sales fell 11%.

Although Fossil badly missed estimates, CEO Kosta Kartsotis said on a company earnings call that its results were "in line with our expectations" and that the downturn in the retail industry, including its own move to close 40 stores since the year-ago period, was to blame for the weak results. Not everyone agreed with the CEO's assessment, however.

"Results were disappointing with top line weakness and margin deterioration driving an earnings miss. With soft demand across categories, geographies, and channels, there is no silver lining to results," wrote Jefferies analyst Randal Konick.

For the second quarter, Fossil predicts it will incur a net loss of between 83 cents and $1 a share and for the full year, it expects a loss in the range of 30 cents to 40 cents a share. The company anticipates that its revenue will decline 8 percent to 11.5 percent in the second quarter and 1.5 percent to 6 percent for the full year.

"We were sticker-shocked by the magnitude of the second quarter guide," said Vasilescu added at the time.

A Fossil retail store.
A Fossil retail store.

Fossil is in the unenviable position of having to battle two major fundamental shifts: a transition to smartwatches and the upheaval in its distribution channel. In March, Moody's Investors Service downgraded Fossil's secured credit facilities, citing weakness in its traditional watch segment.

In its downgrade, Moody's said Fossil will have trouble competing against Fitbit (FIT - Get Report) , which is alarming considering the rival has also experienced a drop in demand for its fitness trackers.

In its fourth quarter, Fossil said it would make a "big bet" on tech wear to offset its declining traditional watch sales. In 2016, Fossil launched 100 wearables for Alphabet's Google (GOOGL - Get Report) Android Wear 2.0 platform.

On the call, Kartsotis reaffirmed that Fossil would be focusing on tech going through the production and sale of "hybrid smartwatches," including touchscreen watches.

"Our entire team is very energized for the challenge ahead of us," Kartsotis said.

Kartsotis may want to temper his enthusiasm given the brutal retail scene at the moment.

So far in May, announced store closings are nearly twice that of this time last year, while announced openings are up 20 percent, according to new data from global think tank Fun Global Retail & Technology. Overall, closings have been announced for 3,296 stores this year, up a disturbing 97 percent year-over-year. Most of the shuttered stores have comes from the department and specialty store categories.

In February, J.C. Penney (JCP - Get Report) -- a retailer that sells Fossil watches -- announced a plan to shut down 138 underperforming stores. The store closures, which are poised to be completed by July 31, represent 13 to 14 percent of J.C. Penney's current store base and less than 5% of annual sales.

J.C. Penney had said same-store sales at the targeted locations were "significantly below" the remaining store base and operate at a much-higher-expense rate due to poor productivity. The company is expected to gain some $200 million in annual cost savings from the closings. Fellow department stores Macy's (M - Get Report) (which also sells Fossil) and Sears have continued to close stores in droves amid the shift to online shopping.

In total, more retailers have filed for Chapter 11 protection in 2017 alone than in the entire 2016 year, and about 20 more, by TheStreet's count, have announced major store closures.