Sears Ancaster store among 59 to close under court-supervised restructuring
TORONTO — Sears Canada Inc. will close 59 stores and cut approximately 2,900 jobs under a court-supervised restructuring, the beleaguered retailer said Thursday following years of dwindling sales and a revolving door of top executives.
Locally, the only Sears location slated for closure is the Ancaster Sears Home store, which was renovated in 2013 — one of three Home Stores to undergo a major transformation.
The other Sears locations in Burlington and Hamilton were not affected.
The Lime Ridge Mall Sears was among four Sears stores in a major remodelling in 2012.
The outlet store in the Cambridge Centre mall is among the stores that will close. The store, which is expected to remain open until early fall, has 10 full-time and 63 parttime employees.
Sears operates a full-line department store in Fairview Park mall in Kitchener. It is not on the list of stores to be closed.
The announcement came after the Ontario Superior Court of Justice granted the department store chain temporary protection from creditors under the Companies’ Creditors Arrangement Act (CCAA).
The company plans to continue operating throughout the restructuring and said it intends to emerge as a leaner, more focused operation better able to compete in the hypercompetitive retail industry.
“However, to achieve that goal and to rightsize its business, the Sears Canada Group anticipates that a number of stores will have to be closed, operating costs reduced, business lines exited, and head count reductions implemented,” Sears Canada said in documents filed with the court.
The 30-day court protection from creditors will give it some “breathing space” as it tries to revamp its business, the retailer said. The court also authorized Sears Canada to obtain up to $450 million in financing to maintain operations.
Under the court-supervised plan, Sears Canada will close 20 full-line department stores, 15 Sears Home stores, 14 Sears Hometown locations and all 10 of its Sears Outlet stores. Its department stores range from 30,000 to 300,000 square feet, with many serving as shopping hubs in small towns throughout the country.
About 500 office positions will be eliminated immediately, with the rest of the job losses coming as the stores begin to close.
As of May 30, Sears Canada employed approximately 17,000 people, with 10,500 in part-time positions and the rest working fulltime. The move, which retail experts had been anticipating for some time, marks a culmination of struggles for a company with roots in Canada that stretch back generations.
Sears Canada has piled up losses and seen its stock nosedive, losing more than 80 per cent of its value in the last year.
Branding and marketing strategist Tony Chapman said one of the biggest issues Sears Canada has was that it had difficulty adapting to changing consumer tastes while competitors such as Walmart, Costco and Amazon marched onto their terrain. “They lost touch,” Chapman said.
“It was inevitable that a low-cost producer like an Amazon or Walmart is going to eat your lunch and that’s what happened.”
The Canadian Press with files from Record staff