Observers temper expectations for Sears liquidation deals

TORONTO Dozens of Sears stores slated for closure begin liquidation sales Friday, but bargain hunters would be wise to temper their expectations, say industry experts.

Eager to avoid bankruptcy, the one-time retail giant is counting on hordes of shoppers to scoop up discounted merchandise, fixtures and equipment as soon as possible.

But despite the everything-must-go sales at dozens of outlets, Sears still has to survive as a company once restructuring is complete, says marketing Prof. David Soberman from the University of Toronto’s Rotman School of Management.

“They have an obligation to their shareholders,” says Soberman. “They’re not trying to squeeze every last penny (but) just like any company they’re trying to make themselves as profitable as they can.”

Typically, liquidation sales follow a triedand-true process: start with a modest discount and whatever products are left will gradually get dropped in price until they’re gone.

Sears has until Oct. 12 to vacate premises slated for closure, most of them in small-town Alberta, Ontario, Quebec and Saskatchewan.

A shorter liquidation schedule could mean steeper discounts sooner. Soberman says it’s a balancing act for Sears, which has turned to external liquidators to handle downsizing — some of whom were involved in similar sales for Target and Eaton’s.

“Longer time means the discounts don’t have to be as deep, but then you have to pay the staff longer and it’s more difficult to rent the store, so all of these things are trade-offs.”

Sears has been operating under court protection from creditors since June 22, when it announced plans to shutter 59 stores and cut approximately 2,900 jobs.

The liquidation process involves 54 of those stores, starting on or shortly after Friday.