Tem­pered ex­pec­ta­tions


The Guardian (Charlottetown) - - BUSINESS - BY CAS­SAN­DRA SZKLARSKI

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 ev­ery­thing­must-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 tried-and-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.

Whether sig­nif­i­cant crowds show up is a ques­tion.

Some ob­servers ex­pressed dis­gust that thou­sands of long­time em­ploy­ees are not get­ting sev­er­ance pay­ments while ex­ec­u­tives

are slated to re­ceive $9.2 mil­lion in re­ten­tion bonuses. i4P Än­r4FBST$" JT MBZJOH

off hun­dreds of em­ploy­ees and not pay­ing sev­er­ance? I wont spend an­other dime in Sears,” wrote Twit­ter user Änr85'JT)BMPO$PO XIJMF Än­r5FDOJDP1BJYBP UXFFUFE i$MPTF ZPVS EPPST Än­r4FBST$" I will not spend an­other dime UIFSF UIJT JT EJTHVTUJOH u

But re­tail ex­pert Maureen Atkinson was skep­ti­cal that bad press would keep bar­gain hunters away.

“People will do what­ever is in their own best in­ter­est,” says Atkinson, se­nior part­ner at the 5PSPOUP CBTFE + $ 8JMMJBNT

Group. Still, Atkinson ques­tioned whether the deals will be that great any­way. She ad­vises shop­pers to be pre­pared to ac­cept what­ever brand is be­ing liq­ui­dated, and cau­tions against hop­ing to score that fridge or range you might have had your eye on.

“The re­al­ity is that you may get what would be the equiv­a­lent of a scratch-and-dent kind of sit­u­a­tion,” says Atkinson. “They are floor mod­els. In the stores they don’t carry in­ven­tory of ma­jor ap­pli­ances.”

The man­u­fac­turer will likely still of­fer a stan­dard war­ranty, but she doubted Sears would sell ex­tended cov­er­age.

“And even if they did, I’m not sure I would want to be buy­ing an ex­tended war­ranty from a com­pany that is in bank­ruptcy pro­tec­tion,” says Atkinson.

Ap­pli­ances, though, are tra­di­tion­ally one of Sears’ stronger sell­ers so it’s un­clear if they will even be in­cluded in the deals. A Sears spokesman de­clined to com­ment.

Sober­man ex­pected dis­counts will vary widely be­tween lo­ca­tions.

“The things that are sell­ing well in other lo­ca­tions will be moved. Things that aren’t sell­ing well are where you’re go­ing to get the strong­est dis­counts. It’s also go­ing to be highly lo­cal spe­cific - what’s on spe­cial in Truro (N.S.) may be quite dif­fer­ent from what’s on spe­cial in a Sears lo­ca­tion that’s clos­ing in On­tario.”


A Sears Canada out­let is seen Tues­day, June 13, in Saint-Eus­tache, Que. Dozens of Sears stores slated for clo­sure be­gin liq­ui­da­tion sales Fri­day, but bar­gain-hunters would be wise to tem­per ex­pec­ta­tions, say in­dus­try ex­perts.

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