Demise of Sears Canada voted top business story
Asmattering of retail chains closed their doors in another tough year for the industry in 2017, but the demise of Sears Canada seemed to resonate most with Canadians, many of whom grew up devouring its annual holiday wish book and shopping at the department store.
The high-profile closure and ensuing controversies helped make Sears Canada’s demise the 2017 Business News Story of the Year. It received 47 per cent of the votes from journalists in an annual poll of the country’s newsrooms conducted by The Canadian Press.
Small business tax changes received 16 per cent of the votes from a field of nine candidates, while trade talks and marijuana companies tied for third place at 14 per cent each.
“For many Canadians, Sears is more than a store, it’s an institution,” said Allan Shifman, managing editor at Yahoo Canada Finance.
“Add to that the horrible way the retailer wound down . . . This is a story that resonates with all Canadians, not just the ones tuned into the finance news cycle.”
The struggling chain spent the bulk of the year attempting to re-invent itself — a hodgepodge process that included adding grocery stores to certain locations, hosting a pop-up shop in a trendy Toronto neighbourhood and developing dash buttons that would give customers the ability to restock favourite products from home.
But those efforts failed to materialize and the long-time staple of Canada’s retail landscape filed for creditor protection in June, sold off some locations and decided to liquidate the rest of its roughly 190 stores, leaving some 15,000 employees out of work.
The chain’s closure sparked a number of controversies.
Sears Canada planned to dole out millions of dollars in retention bonuses to head office staff while grappling with a more than $260-million shortfall in its pension plan.
A plan by executive chairman Brandon Stranzl that would see the company continue to operate was rebuffed in favour of liquidation, prompting further questions about whose interests were being prioritized.
After the sales began, the Competition Bureau said it was investigating allegations that some merchandise was marked up ahead of the liquidation.
The way Sears Canada treated its employees also struck a chord with many, given the chain was a big employer across the country, especially in smaller towns and cities, where few retailers are present.
The company originally wanted to pay a total $7.6 million to 43 top employees, but, facing backlash, revised that to a total of $6.5 million to 36 employees.
The reduction was approved by an Ontario judge, but some employees argued it was still too much money given the company was also facing a 19per-cent pension plan funding shortfall, meaning employees would likely see a similar cut to their benefits.