Latest closures put future of Sears in doubt

Chain’s decade-long decline called ‘longest liquidation known to the retail industry’

The future of Sears Canada is in greater doubt after it announced Friday night that it will close an additional 10 department stores, including the locations at Fairview Mall and Scarborough Town Centre in the coming months.

The Sears stores at Lime Ridge Mall in Hamilton and Oakville Place will also be closed, along with six other Sears department stores across Canada. One more Sears Home store, in Kelowna, B.C., will also be closed.

The additional retail locations being closed employ 1,200 people, according to the company. Another 12,000 people continue to work for Sears.

There have been no successful bids to keep Sears operating as a whole, the company also announced.

A plan submitted by executive chairperson Brandon Stranzl was conditional on financing and other factors, and has so far been unsuccessful. “Understanding, among other components, the role a successful bid could play in saving jobs, Sears Canada advisers continue to engage with Mr. Stranzl with the goal of enhancing the value and reducing the conditionality of the proposed transac- tion,” the company’s news release said.

When it obtained protection from creditors in June, the company announced it would close 59 stores of different formats, shedding 2,900 jobs, in an effort to restructure. Those closures will, for the most part, be completed by the end of Sunday, according to Sears spokesperson Joel Schaffer.

There are buyers for parts of the business, including S.L.H. Transport Inc., which provides transport within North America, to Sears Canada and other third-party customers, and portions of the Sears Canada Home Improvements Business.

Indigo Books and Music Inc. has agreed to buy the company’s lease on a distribution centre in Calgary, while Canadian Tire agreed to buy the rights to the Viking appliance brand in Canada. The purchase prices were not disclosed.

According to the terms of the agreements submitted in support of the creditor protection application, Sears Canada is obliged to liquidate the assets it does not sell.

Antony Karabus, chief executive officer of HRC Retail Advisory, said that while Sears Canada continues to draw shoppers, it has been in decline for 16 years — in 2001 it posted revenues of $6.7 billion with 125 department stores. In 2016 it rang up $2.6 billion in sales with 95 department stores.

“It almost seems like the longest liquidation known to the retail industry. What is that old expression, you burn the furniture to keep the house warm? That is what they have been doing for a long, long, time,” Karabus said.

Karabus said that Sears was the victim of dramatically increased competition from discount retailers including Winners, Home Sense and Walmart.

The company will seek an extension of the stay period to Nov. 7.

The locations of the full-line department stores being closed include: Nanaimo North Town Centre; Brentwood Town Centre, Burnaby, B.C.; Kelowna, B.C.; Polo Park, Winnipeg; Fairview Pointe-Claire, Que. and Avalon Mall, St. John’s, N.L.