Sears liquidation sales begin today
Dozens of Sears Canada 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.
The Sears in Ancaster is one of the stores expected to close in the court-supervised restructuring.
Despite the everything-must-go sales at dozens of outlets, Sears Canada still has to survive as a company once restructuring is complete, says marketing Prof. David Soberman of 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 Canada 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 Canada, 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 Canada 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.
“So @SearsCA is laying off hundreds of employees and not paying severance? I wont spend another dime in Sears,” wrote Twitter user @WTFisHalonCon, while @TecnicoPaixao tweeted: “Close your doors @SearsCA! I will not spend another dime there, this is disgusting!”
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 Toronto-based J.C. Williams 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.
Soberman expected discounts will vary widely between locations.