VANCOUVER (NEWS 1130) – Sears Canada Inc. is seeking court approval to liquidate its roughly 130 remaining stores, leaving approximately 12,000 employees without a job.
The move would affect 11 department stores across BC, including six in the Lower Mainland.
The embattled retailer, which has been operating under the Companies’ Creditors Arrangement Act since June, said Tuesday that it had failed to find a buyer that would allow it to continue as a going concern.
The court overseeing Sears Canada’s operations is expected to hear a motion Friday seeking approval for the liquidation and wind down of the business.
Last Tuesday, Sears received a revised bid from a buyer group led by its executive chairman Brandon Stranzl to buy the business as a going concern.
However, a lawyer for Sears Canada’s court-appointed monitor told the court last week it would consider it but the company was running out of money and time.
On Tuesday, the retailer said in a statement that “following exhaustive efforts, no viable transaction” was received. The company plans to start the liquidation sales no later than October 19 and expects them to continue for 10 to 14 weeks.
Marketing expert Raymond Shoolman with Dig 360 says buyers likely didn’t see the value of picking up an out of date company.
“For somebody to come in, in this age of revolving retail when it’s changing, it’s evolving all the time, by the time they could catch up it would take an enormous amount of money and I don’t think anyone had enough faith in Sears or the brand.”
Schoolman says Sears’ closure leaves a big hole for the Bay to fill, so long as it continues to keep up with trends and technology.
“Not saying that the Bay aren’t in trouble themselves in many respects but I think they did a really, really good job in turning themselves around. And yes, they might have branded themselves as a little more upscale- they almost had to do that in order to stay alive.”
He says it’s a lesson to other brick and mortar stores that they should never stop evolving and keeping up with changing trends and technology.
Sears Canada currently has 74 full-line locations, eight Sears Home Stores, and roughly 49 Sears Hometown stores, according to Sears Canada spokesman Joel Shaffer.
The retailer currently has approximately 12,000 employees, three-quarters of which are part-time, Shaffer added. Of the roughly 800 employees in Sears Canada’s head office, the vast majority will exit next week, he said.
That tally doesn’t include the 2,900 in job reductions Sears Canada previously announced in June, when it announced the closure of 20 full-line locations, 15 Sears Home stores, 10 Sears Outlet and 14 Sears Home Town locations.
Sears Canada said in a statement Tuesday it “deeply regrets this pending outcome and the resulting loss of jobs and store closures.”
Litigators for a group of lenders who have provided debtor-in-possession financing to Sears Canada to keep it afloat pushed for a liquidation agreement to be entered into by October 7 at the latest. The lenders pushed for approval no later than October 13, in order to liquidate before the crucial holiday season and maximize value.