Sears Canada closes 59 stores and lay off 2,900 in restructure
Sears Canada will close 59 of its stores across the region and make 2,900 redundant in a court-supervised restructuring move designed to relieve pressure from debtors.
On Tuesday 20th June, Sears was successful in being granted protection from its creditors under the law that covers insolvency proceedings, whist they have just 30 days to implement a restructure.
This includes $450m in debtor-in-possession financing and the need to close numerous stores across Canada and lay off thousands of employees.
20 full Sears stores will be closed during the process, as well as 15 Sears Home Stores and all 10 of its outlet stores. One-third of its current retail footprint will disappear as a result.
Sears’ stock has lost 80% of its value since the turn of the year and has decreased from $40 in 2000 to around 62 cents a share. Currently, trading is currently suspended on their stocks and they will soon be delisted from the TSX.
After reassuring themselves in 2014 that their future ‘looks bright’, Sears took a different tact in March by saying they had ‘substantial doubts’ that they would be able to survive for much longer.
However, they could still be confident of turning their problems around as a revamp has seen their sales grow for two quarters in a row.
Ultimately, the rise of online shopping has hit Sears and similar retailers hard – an Amazon-led revolution took place and brick and mortar stores have been slow to adapt and e-commerce sales have increased year on year.
Sales for digital shopping during the last Christmas period were up 14% compared to the same period in 2015, whilst physical stores only saw gains in the single digits.