Sears Canada says it is seeking court protection

Laura Christensen
June 24, 2017

Sears Canada has filed for bankruptcy protection, according to a company report released Thursday. Most employees are part-time workers paid hourly.

With sales declining TravelBrands negotiated what's now known as the Amended Sears Agreement to reduce its advertising commitments; adopt more flexible store hours; reduce the annual percentage of gross revenue payable as royalties; reduce its minimum annual commission payments by 27%; and reduce annual lease payments for common area charges by 13%.

Though it reported even lower EBITDA, revenue and a larger net loss over past year, Sears Canada has acquired $109 million in order to continue restricting the company, and has apparently seen rewards of this approach with same-store sales increasing by 2.9% in Q1-17 compared to Q1-16.

The locations slated for closure include 18 Sears stores and two Kmart stores, which are located in Sarasota, Florida; Roseville, Michigan; Watchung, New Jersey and East Northport, New York, among other locations, according to Business Insider. Seritage reported the closings in an SEC filing Friday.

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The spokesman said the company has been "strategically and aggressively evaluating our store space and productivity" and "accelerated the closing of unprofitable stores".

The timing of the closures has not been finalized, but RioCan also says the closure of a Sears Outlet store in Timmins, Ont., had been previously announced and the lease is about to expire. "Approximately $1 billion of that total will come from Macy's closures, $1 billion from Sears and Kmart closures, and $500 million from J.C. Penney closures, we estimate".

Department store retailer Sears Canada is to axe around 2,900 jobs and shutter 59 stores as part of a court-supervised restructuring of the business.

The other six locations are Sears Home stores in Calgary, Toronto and four smaller Ontario cities (Kingston, Orillia, Sudbury, Windsor). The store will close to the public in mid-September and the Sears Auto Center will close in late July.

Other reports by My Hot News

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