BUSINESS

Sears Canada Seeking Bankruptcy Lawyer? Company Denies Report

09/26/2014 01:52 EDT | Updated 09/26/2014 01:59 EDT
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Sears Canada is denying a report in the New York Post it is exploring the possibility of a bankruptcy filing.

Citing “sources close to the matter,” the Post said a law firm in Canada had received an inquiry from Sears regarding the possibility of creditor protection for the struggling retailer.

The paper noted that “a bankruptcy filing isn’t imminent or even certain.”

Sears Canada did not immediately respond to a request for comment from The Huffington Post Canada, but a spokesperson for the company told the Post “there is no truth” to the report.

The Post’s story comes a day after Sears Canada CEO Calvin McDonald resigned unexpectedly, to take a role at a “leading multinational company.”

Some analysts saw McDonald’s resignation as a negative move that lessened the retailer’s chances of a successful recovery.

Sears Canada’s parent company, U.S.-based Sears Holdings, has had no luck finding a buyer for its 51-per-cent stake in the Canadian operation.

Facing tough competition from new entrants and online retailers, Sears Canada has been busily selling off its most profitable locations, and has implemented multiple rounds of layoffs.

The retailer managed to swing to a profit in the latest quarter, making $152.8 million compared to a loss of $9.8 million in the same period a year earlier.

But its revenue was down 10 per cent, and same-store sales fell 2.5 per cent.

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