Sears Canada set to close after failing to find buyer (updated)
10/10/2017 22:17
(Adds context throughout)
By Nichola Saminather
Oct 10 (Reuters) - Sears Canada moved a step nearer to
permanent closure after several attempts to find a buyer failed,
with the retailer saying it will seek court approval on Friday
to shutter its remaining 130 stores, leaving 12,000 employees
without jobs.
The retail chain is the latest victim of a widespread shift
in consumer behavior demanding more convenience and up-to-date
fashions that has seen nimble online operators such as
Amazon.com Inc. AMZN.O claw market share from
bricks-and-mortar retailers that have clung to their traditional
business models.
It also adds to the list of retail bankruptcies this year.
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Sears Canada, which began operations in Canada in 1952,
expects liquidation sales to begin on about Oct. 19, and
continue for 10 to 14 weeks, the Toronto-based company said in a
statement on Tuesday.
Weighed down by over C$1.1 billion ($879 million) in
liabilities, almost matching its assets, and falling sales every
quarter since it was spun off from Sears Holdings SHLD.O in
2012, Sears Canada filed for creditor protection in June. It
laid out a restructuring plan that included cutting 2,900 jobs
and closing roughly a quarter of its stores. urn:newsml:reuters.com:*:nL3N1JA471
It last week won court approval to close 11 stores and sell
some businesses, and to extend creditor protection to Nov. 7.
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The only takeover bid that offered some hope of keeping
Sears Canada afloat failed, with creditors arguing liquidation
would yield a better payout than to keep the company solvent.
That bid, from Executive Chairman Brandon Stranzl, who
stepped away from day-to-day operations to come up with a
proposal, presented "significant closing risk and uncertain
recovery," according to court-appointed monitor FTI Consulting.
A revision to the bid on Oct. 3 failed to convince the
creditors otherwise. Led by Wells Fargo Capital Finance Corp and
GACP Finance Co they pushed Sears Canada to enter into
liquidation agreements for the rest of its assets by Oct. 7.
The company received no viable transaction to keep it in
business, the company's statement on Tuesday said.
"Sears Canada, with the recommendation of its advisors and
approval of the (court-appointed) monitor, FTI Consulting Inc,
is seeking an order to commence a liquidation that would result
in a wind-down of its business following Court approval," the
Toronto-based company said.
($1 = 1.2515 Canadian dollars)
(Reporting by Nichola Saminather in Toronto, Ahmed Farhatha in
Bengaluru; editing by Susan Thomas and Grant McCool)
((ahmed.farhatha@thomsonreuters.com; +1-646-223-8780, outside
U.S., +91-80-6749-6568; Reuters Messaging:
ahmed.farhatha.thomsonreuters.com@reuters.net))
Keywords: SEARS CANADA HEARING/