BUSINESS

Sears Canada To Ask Court To Shut All Remaining Stores

The retailer says it "deeply regrets this pending outcome and the resulting loss of jobs and store closures."

10/10/2017 13:33 EDT | Updated 10/10/2017 15:33 EDT
A Sears Canada outlet is seen Tuesday, June 13, 2017 in Saint-Eustache, Que. Sears Canada Inc. is applying for court approval to liquidate all of its remaining stores and assets after failing to find a buyer that would allow it to continue as a going concern.

TORONTO — Sears Canada Inc. is seeking court approval to liquidate its roughly 130 remaining stores, leaving approximately 12,000 employees without a job.

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 Oct. 19 and expects them to continue for 10 to 14 weeks.

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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 Oct. 7 at the latest. The lenders pushed for approval no later than Oct. 13, in order to liquidate before the crucial holiday season and maximize value.

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