Lampert blames Sears Canada management
Eddie Lampert, chair and chief executive of Sears Holding Corp., is blaming Sears Canada for exacerbating its problems before it filed for creditor protection.
Lampert’s ESL Investments is the largest shareholder in Sears Canada, which is in the process of liquidating and closing its remaining stores.
In a post on his blog, Lampert says the retailer’s reinvention strategy was risky and untested.
“In particular, ESL noted that it would be risky and unwise for the company to pursue additional borrowings on onerous terms to fund a new, untested strategy,” he wrote.
“Despite this advice, management decided to proceed with these actions and the company’s operating losses and cash drain rapidly worsened.”
Lampert posted the comments in response to a report by the Globe and Mail that chronicled Sears Canada’s troubles.
Sears Canada has been operating under the Companies’ Creditors Arrangement Act since June, but had been struggling for years.
It had hoped to restructure and keep many of its stores open, but the retailer received court approval earlier this month to begin its liquidation sales after failing to find a buyer for its operations.
A group led by Brandon Stranzl, who stepped down as the company’s executive chair following approval of the liquidation sales, had been in talks to purchase the retailer and continue to operate it, but no deal was reached.
Liquidation sales at the 74 remaining Sears department stores and eight Home stores started last Thursday.
The sales are expected to last between 10 to 14 weeks. Sears Canada timed its liquidation sales to take advantage of the busy holiday shopping season to maximize the value it could attain for the inventory.