Sears Canada seeks to close all stores, lay off 12,000

Northern News (Kirkland Lake) - - BUSINESS - HOL­LIE SHAW

TORONTO — Sears Canada is clos­ing up shop, an­nounc­ing Tues­day that it is seek­ing court ap­proval to close all of its stores across the coun­try and lay off about 12,000 em­ploy­ees.

The move came after weeks of dis­cus­sions with ex­ec­u­tive chair­man Bran­don Stranzl to save the money-los­ing re­tailer, but the com­pany failed to reach an agree­ment after his most re­cent bid last week.

“Fol­low­ing ex­haus­tive ef­forts, no vi­able trans­ac­tion for the com­pany to con­tinue as a go­ing con­cern was re­ceived,” said a state­ment from the re­tailer, adding the liq­ui­da­tion has been rec­om­mended by its fi­nan­cial ad­vi­sors in re­struc­tur­ing and its court-ap­proved bank­ruptcy mon­i­tor, FTI Con­sult­ing.

“The com­pany deeply re­grets this pend­ing out­come and the re­sult­ing loss of jobs and store clo­sures,” the state­ment said.

Sears Canada en­tered bank­ruptcy pro­tec­tion in June, say­ing it could not con­tinue to op­er­ate as a go­ing con­cern with­out a new source of fi­nanc­ing.

It comes after more than a decade of sales de­clines for Sears Canada, founded as Simp­sons-Sears in 1952 as a na­tional mail-or­der busi­ness in part­ner­ship be­tween Toronto’s Robert Simp­son Com­pany of Toronto and Sears Roe­buck Co. of Chicago.

While Sears Canada was viewed as the most likely in­her­i­tor of the mar­ket share void left by Cana­dian depart­ment store chain Ea­ton’s when it folded in 1999 and Sears bought out its re­main­ing as­sets, in the lengthy in­terim pe­riod Sears failed to adapt to a chang­ing mar­ket­place, ced­ing cus­tomers and mar­ket share to Wal­mart, Cana­dian Tire, Best Buy, Costco and Win­ners, and more re­cently, Ama­zon.

“This took a heck of a long time, be­cause the writ­ing was on the wall al­most 20 years ago,” said re­tail con­sul­tant Richard Tal­bot of Tal­bot Con­sul­tants In­ter­na­tional Inc., who has fol­lowed the com­pany for decades.

“It’s very sad, and it’s just amaz­ing how they could frit­ter away their name, rep­u­ta­tion and busi­ness model. What I found astounding was here was a com­pany with a cat­a­logue busi­ness across the coun­try and they some­how messed up when e-com­merce was com­ing in. It was theirs to lose. For the long­est time, Sears was the only place for young fam­i­lies to go. Fifty years ago, it was one of the very few places to give credit.”

Last week, a lawyer for the com­pany told On­tario Su­pe­rior Court judge Glenn Hainey that there was a “short fuse” to a po­ten­tial liq­ui­da­tion of the re­tailer, with the re­tailer’s court-ap­proved lenders press­ing for liq­ui­da­tion of the com­pany’s re­main­ing as­sets to max­i­mize the value of the process for the com­pany’s cred­i­tors, pen­sion­ers and em­ploy­ees.

The debtor in pos­ses­sion lenders, which had been keep­ing the busi­ness afloat since June even as it was los­ing more than a mil­lion dol­lars a day, had asked for ap­proval of a liq­ui­da­tion agree­ment no later than Oct. 13 in or­der to max­i­mize on the busy re­tail pe­riod lead­ing into the hol­i­days.

Sears wants to start the liq­ui­da­tion sales no later than Oct. 19 and ex­pects them to con­tinue for 10 to 14 weeks.

THE CANA­DIAN PRESS FILES

Sears Canada is seek­ing court ap­proval to close all of its stores across the coun­try and lay off about 12,000 em­ploy­ees.

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