Sears Canada boss steps down to launch bid for troubled retailer
HOLLIE SHAW
POSTMEDIA NETWORK
TORONTO — The executive chairman of Sears Canada has stepped down in order to focus on making a bid for the insolvent retailer, currently operating under court protection.
An internal employee memo Wednesday says Brandon Stranzl wants to keep the business operating as a going concern and intends to submit a bid for Sears or some of its assets under a court-approved sale and investment solicitation process (SISP), which has an Aug. 31 deadline.
Sears Canada filed for courtappointed protection from its creditors in June under the Companies Creditors’ Arrangement Act, announcing the closure of 59 stores and the layoffs of 2,900 of its 17,000 employees.
“The Board thought it was best for Brandon to focus exclusively on putting the bid together and step away from the day-to-day operations of Sears Canada,” said the memo from Graham Savage, chair of the retailer’s special committee of the board of directors.
Becky Penrice, the retailer’s executive vice-president and chief operating officer, will now oversee the executive team, the note said. “The goal of any such proposal is to facilitate a path for Sears Canada to emerge from CCAA and so that all of us can continue with the company’s reinvention plans.”
Stranzl, who was not available for comment on Wednesday, “is still an employee and is still receiving his salary” during the process, Sears Canada spokesman Vincent Power confirmed.
Before the company announced the restructuring, Stranzl and his team had refashioned part of Sears’ retail business to sell off-price merchandise in the vein of Winners and overhauled its IT and online shopping platform.
Last month, court-appointed monitor FTI Consulting said more than 20 parties have signed non- disclosure agreements with Sears Canada as part of the process.
While it looked for a while as though Stranzl would square off in a bid for the retailer against two of Sears Canada’s biggest U.S.-based shareholders, Sears Holdings CEO Edward Lampert and Fairholme Capital Management LLC, the two investors dropped an agreement to make a potential joint bid for the retailer in late July.
Together, the two control about two-thirds of the retailer’s shares, and both said they would consider options for Sears Canada independent of one another. Lampert’s hedge fund ESL Partners LP, which has a 45-per-cent stake in the company, said it could also sell some or all of its Sears Canada shares in order to generate a tax loss for its investors.
Wednesday’s news comes as Sears Canada vies for survival and aims to emerge from the restructuring as a smaller, leaner company at a time of unprecedented change in retail, with traditional department stores among the hardest hit.
Amid the upheaval, senior vice president of marketing Zachary James quit last week, and Michael Geddes, senior vice-president of merchandise planning and operations, has announced his resignation and will leave after next week, Power confirmed.