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Thread: Sears Canada Liquidates: 12,000 Canadians To Lose Their Jobs

  1. #1
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    Sears Canada Liquidates: 12,000 Canadians To Lose Their Jobs

    Sears Canada Liquidates: 12,000 Canadians To Lose Their Jobs

    12,000 jobs may not sound like much but that's roughly how many jobs Canada adds to its economy each month. Only in this case, that's how many workers are about to find themselves without a job because overnight Sears Canada announced plans to liquidate its remaining 150 stores instead of restructuring, the latest admission of brick and mortar defeat in the war with Amazon, with the result some 12,000 job losses in the coming weeks.

    In a statement filed on Tuesday, the Toronto-based chain, which filed for creditor protection in June, listing liabilities of C$1.1 billion, said it would seek court approval for the filing on Friday and begin liquidation sales at its remaining stores on Oct. 19 at the earliest. The terminal decision follows a last-ditch attempt by executive chairman Brandon Stranzl, backed by Blackstone Group LP, to put together an offer to save the retailer. However, Sears Canada failed in this Hail Mary approach and the company said it didn’t receive a viable bid to keep the stores operating as a going concern. This means that whereas Sears had been gradually closing its 225 stores, it will now accelerated the move, potentially closing all remaining stores in the coming days.

    The liquidation will hardly come as a major surprise:


    Sears Canada has struggled to provide a consistent, appealing brand to its customers across all of its channels, including its website, social media and physical stores, he said. The company has reported nine years of sales declines and years of losses, according to data compiled by Bloomberg.
    The Canadian version of Sears is the latest victim of department-store decline that’s swept North America as shoppers gravitate online. While the retailer has dabbled in pop-up stores and e-commerce, its distribution centers aren’t as automated as Amazon.com Inc. or even Canadian peer Hudson’s Bay Co., which last year opened its own robotic facility to accelerate online orders.

    “When you have the likes of Amazon that is investing in research and development continuously, it’s just too much for them to react quickly enough,” Jean Rickli, an adviser at retail consultants J.C. Williams Group, told Bloomberg. “It follows the trend of what we noticed in the U.S., with department stores and their decline.”
    Sears' loss is Amazon's gain: According to Rickli, only 15 to 20% of Canadians are Amazon Prime members, compared with about 50% of Americans, giving the U.S. company lots of room to grow north of the border. The biggest loser, however, is billionaire Eddie Lampert, the company's biggest shareholder, who partially spun off the company from Sears Holdings Corp. in 2012.


    The windup raises questions about whether Sears Holdings may also falter. Sears, once the world’s largest retail chain, has racked up more than $10 billion in losses over the past six years. Lampert, a hedge fund manager and also Sears Holdings’ chief executive officer, has been willing to use his own money to keep the business afloat and recently gave the company a $100 million loan.
    "Ostensibly, Eddie could have cut a check to make it through it, but clearly the evaluation he made was that there wasn’t enough there,” Noel Hebert, a Bloomberg Intelligence analyst said. “He sees value left in the U.S. operations but didn’t see a ton of worth left in the enterprise to write a $200 million check to keep it rolling.”
    Which begs the question: how long until Eddie decides that throwing good money after bad in Sears USA is also the more prudent decision.
    As for the Canadian's company thousands of workers and retirees, it remains to be seen what will happen to their pensions: Sears Canada has 18,000 retirees and beneficiaries whose monthly pensions its has to address. A motion was filed in August for a windup of the plan, which would require the company to pay the full C$266.8 million deficit, according to the filing. That motion has been postponed until at least Nov. 30.
    There is also the question of what happens to all the local malls that suddenly find themselves without 150 anchor tennants. The Sears bankruptcy comes two years after Target's liquidation left a hole in many of the country’s malls, which made it tougher for Sears Canada to find buyers for its real estate and leases.
    According to Trepp, while the Sears stores in Canada which back CMBS loans are not plentiful, but there are a few to footnote. The largest of those is the $21.4 million Festival Marketplace loan, which makes up 7.23% of the remaining collateral behind IMSCI 2013-4. The collateral is a 224,836 square-foot retail property in Stratford, Ontario. Sears is the top tenant there with 37% of the space. For the year of 2016, DSCR (NCF) was 1.45x. The property was built in 1990 and valued at $34.3 million in late 2012. Also worth footnoting is the $10.8 million Sorel loan, which makes up 2.62% of the collateral behind REALT 2016-2. The property contains almost 360,000 square feet, of which Sears occupies 17.5%. This Sears was slated for closure in July and it will close for good this week. Walmart is the top tenant with 18.9% of the space.

    This is not an issue.
    Trudeau will welcome all those newly unemployed with open arms and a Healthcare Insurance ID card...
    ...just like he did all those Islamofascist invaders who were going to be so great for the economy of Canada.
    ---:..Gratitude is the best attitude..:--

    If it isn't broke, don't try fixin it..!!!


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  2. Thanks wattso99, burgerboy, sundayme thanked for this post
  3. #2
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    more unemployed
    ozzy

  4. Thanks sundayme thanked for this post
  5. #3
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    Idiots in charge couldnt catch up with the tech today and people got screwed by losing their livelyhoods. Hudsons Bay is next in the works from what iver heard now.

  6. Thanks benney, fordhell, trin/tuco thanked for this post
  7. #4
    Walleye Hunter
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    Well there were a hell of a lot more laid of in the automotive industry during the last slump and no one seemed to give a shit because they made good money. I was one of them and the company that went bankrupt stiffed me out of 38K in severance when they tossed me out the door.

    False News
    is started by haters
    spread by idiots
    and accepted by fools.




  8. Thanks nobodyspecial, burgerboy, trin/tuco thanked for this post

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