Sears’ failed turn­around blamed on ‘ob­sta­cles’

Winnipeg Free Press - - NEWS -

ORONTO — Sears Canada’s for­mer ex­ec­u­tive chair­man de­fended his plan to turn around the em­bat­tled re­tailer, and said his bid to buy the com­pany and save it from liq­ui­da­tion was ham­pered by a cred­i­tor-pro­tec­tion process bi­ased to­wards liq­ui­da­tion.

Bran­don Stranzl, speak­ing pub­licly for the first time since the re­tailer be­gan a full liq­ui­da­tion of its re­main­ing stores ear­lier this month, told re­porters the cred­i­tor-pro­tec­tion process which Sears Canada en­tered in June was struc­tured as a sale rather than a re­ha­bil­i­ta­tion from the be­gin­ning.

“Ev­ery­body wanted there to be a go­ing con­cern so­lu­tion that saved the jobs, but there were many ob­sta­cles and many rules that seemed to be in place to get in the way,” Stranzl said dur­ing a press con­fer­ence on Mon­day.

Stranzl stepped away from his role in Au­gust and had been in weeks-long dis­cus­sions with the em­bat­tled re­tailer to buy it and con­tinue to op­er­ate it. How­ever, no deal was reached. Sears Canada be­gan liq­ui­da­tion sales at its roughly 130 re­main­ing stores across the coun­try on Oct. 19.

The re­tailer got the green light from an On­tario court to pro­ceed with its full liq­ui­da­tion ear­lier this month. Stranzl’s com­ments Mon­day also came af­ter Ed­die Lam­pert, the chair­man and chief ex­ec­u­tive of Sears Hold­ing Corp.,

Tblamed Sears Canada for ex­ac­er­bat­ing its prob­lems be­fore it filed for cred­i­tor pro­tec­tion. Lam­pert, whose ESL In­vest­ments is the largest share­holder of Sears Canada, said in a blog post last week that the re­tailer’s rein­ven­tion strat­egy was “untested” and a “less risky strat­egy... could have avoided the un­for­tu­nate con­clu­sion.”

He added that ESL was not in­formed in ad­vance that Sears Canada was seek­ing pro­tec­tion un­der the Com­pa­nies’ Cred­i­tors Ar­range­ment Act, and was “ex­tremely un­happy” with the de­ci­sion.

“ESL’s de­ci­sion not to par­tic­i­pate in a go­ing con­cern bid by the for­mer CEO of the Com­pany was based on both the im­prob­a­bil­ity of a go­ing con­cern bid be­ing ac­cepted and the lack of con­fi­dence in the go-for­ward strat­egy, which did not rep­re­sent a change from the ap­proach that re­sulted in the Com­pany’s in­sol­vency,” Lam­pert wrote.

When asked about Lam­pert’s com­ments, Stranzl said he was “con­fused” as ESL was kept in­formed dur­ing the process. He also said his turn­around plan for Sears Canada was “well-rea­soned” but noted the com­pany had enor­mous legacy costs, and the com­pany ran out of time and re­sources.

FRANK GUNN / THE CANA­DIAN PRESS

Bran­don Stranzl, for­mer CEO of Sears Canada, spoke for the first time since liq­ui­da­tion be­gan.

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