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Sears Canada files for creditor protection, cutting 2,900 jobs

THE CANADIAN PRESS | posted Thursday, Jun 22nd, 2017

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A Sears Canada outlet is seen in Saint-Eustache, Que., on June 13, 2017. THE CANADIAN PRESS/Ryan Remiorz
Sears Canada Inc. plans to close 59 locations and cut approximately 2,900 jobs as part of its plan to restructure its business under court protection from creditors.

The struggling retailer says it will close 20 full-line locations, plus 15 Sears Home stores, 10 Sears Outlet stores and 14 Sears Hometown locations.

The company was granted an initial order from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (CCAA) on Thursday.

The struggling retailer has piled up losses and seen its stock dive, losing more than 80 per cent of its value in the last year, despite efforts to reinvent itself at a time when more Canadians are shirking bricks-and-mortar in favour of online shopping.

It has also gone through several leadership changes in recent years.

The company, which was founded as a mail-order business in 1952, warned just last week there was “significant doubt” about its future and that it could be sold or restructured.

The CCAA is a federal law that gives businesses a chance to operate under court supervision while working out a plan with bond holders, landlords, suppliers and other creditors.

“The brand reinvention work Sears Canada has begun requires a long-term effort,” Sears Canada said in a statement.

“But the continued liquidity pressures facing the company as well as legacy components of its business are preventing it from making further progress and from restructuring its legacy assets and businesses outside of a CCAA proceeding.”

Sears Canada said if the Ontario Superior Court of Justice grants it creditor protection, it will try to complete its restructuring and aim to exit protection as soon as possible this year.

Its announcement didn’t elaborate on what it expects to do to restructure its business.

Headquartered in Toronto, Sears Canada has 94 department stores, 23 Sears Home stores and 10 outlets.


Related stories:

Sears Canada raises doubt about ability to continue

Sears Canada shares plunge on report that it’s preparing to seek court protection

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