google-site-verification: googled3ad79e48fba1031.html Sears Canada to Shut Down, Leaving 12,000 Out of Work – Raidar Gist
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Sears Canada to Shut Down, Leaving 12,000 Out of Work

During its recent restructuring, Sears successfully found buyers for some operations, including a division that offered home services like air duct cleaning. Recently, it sold 11 store leases, its trucking operation and a warehouse in Calgary, Alberta.

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A Sears store in Oakville, Ontario. The retailer will close its remaining 166 stores.

Credit
Mark Blinch/Reuters

But the only serious buyer for the bulk of the company appeared to be a management group headed by Brandon Stranzl, the executive chairman of Sears Canada.

In its brief statement on Tuesday, Sears did not discuss the offer from Mr. Stranzl’s group, although many analysts said that the company’s most recent lease sales would have made its recovery plans uncertain.

“Following exhaustive efforts, no viable transaction for the company to continue as a going concern was received,” Sears Canada said.

Liquidation sales will start next week, pending court approval.

Aside from the employees who will lose their jobs, about 18,000 retirees of Sears Canada may be facing cuts to their pension payments. The company’s pension plan has a deficit of nearly 270 million Canadian dollars. In a victory for the pensioners, a judge froze payments to other creditors last month until the pension issue is resolved.

But the fate of the compensation and benefits of the company’s current employees was unclear. About 2,900 employees who were laid off after the company’s insolvency filing in June did not receive severance payments. The company came under severe criticism and calls for boycotts by shoppers after it emerged that it had paid more than 9 million Canadian dollars in bonuses to keep top executives. The company responded with a “hardship fund” of 500,000 Canadian dollars for the laid-off workers.

Sears entered Canada in 1952 through a mail-order catalog business known as Simpsons-Sears, a joint venture with the Robert Simpson Company, a now-defunct Toronto department store. In 1999, it bought the bankrupt T. Eaton Company, which had long been Canada’s dominate department store and mail-order retailer.

Although Sears Canada is a separate company, Sears Holdings owns about 12 percent of its shares. Edward S. Lampert, who controls Sears Holdings through ESL Investments, a hedge fund, holds about 45 percent of Sears Canada through ESL and other entities.

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