Sears Canada Files for Creditor Protection and Announces the Closure of 59 Stores
By Ambia Staley
June 22, 2017Just one week after announcing their first quarter 2017 results, Sears Canada has gone to the courts in order to file for creditor protection so that the ailing company can continue its restructuring process in an effort to continue doing business.
Just last week, Sears' first quarter results revealed a 15.2% revenue drop when compared to last year, along with a $144.4 million net loss. In their June 13 press release, the company admitted that it lacked access to assets such as real estate that could be quickly liquidated to make up for the short-comings. Considering that Sears stated that their first-quarter results raised "significant doubt as to the Company's ability to continue" and their forecasted cash flows are "not expected to be sufficient to meet obligations coming due over the next 12 months," the court filings may not be surprising to many people.
Following shortly after the announcement of the filing, Sears was granted protection by the courts. The initial order provides a 30-day stay and authorizes the company to "obtain debtor-in-possession financing in the aggregate principal amount of $450 million."
Along with the announcement that Sears has obtained court protection, the company announced that it intends to close 20 full-line locations, 15 Sears Home stores, 10 Sears Outlet stores, and 14 Sears Hometown locations -- you can view the full list here. In addition to the closures, Sears also plans to cut around 2,900 jobs across their retail stores and their Toronto corporate head office.
You can read the full press releases regarding the court protection orders here.
Are you surprised to hear this latest development in Sears' story? Let us know in the comments!
Showing 40 Most Recent Comments
View allYeah...
http://www.cbc.ca/news/business/sears-l ... -1.4204178
Just like Target Canada CEO...
Ju Leon...
On the other hand, this is part of a restructuring (closure / liquidation of 59 Sears Canada locations ... 20 Sears Dept Sores - 15 Sears Home Stores - 14 Sears Hometown Stores - and 10 Sears Outlet Stores)... So not a total belly up
But they have said elsewhere that they also plan to get out of Tools, Auto Parts, Electronics & Appliances.... I took the latter to mean the Applance sections in their regular stores (streamlining) as they are not closing all of their Home Stores.
I guess we can only adopt a wait & see strategy at this point in time.
My Extended Warranty is for our Washer & Dryer, and comes due in Oct 2017. What are your dates ?
* Sears Canada pays hefty dividend to major U.S. shareholders
* Nearly half a billion dollars in cash goes back to its U.S. parent company and financier Edward Lampert.
http://www.cbc.ca/news/business/sears-m ... -1.4199261
Picked up 2 doz pairs of men's Hanes sport socks $.37 a pair.
Men's Jockey briefs were $.75 a pair.
Sears & K-Mart in the USA are dying the same slow agonizing death as Sears Canada.
http://www.styledemocracy.com/sears-liq ... BUNIQID%5D
So far, looks like the plans fell through...grocery not happening (yet?) and Sears is still stuck with the renovation bill: https://www.thestar.com/business/2016/1 ... drops.html
I went to the Hamilton store at Lime Ridge Mall. First floor has been essentially made into a Winners (the WTS or Sears 2.0) now.
Then the next odyssey was to determine when I could pick up the order at the store. I had it shipped to store like you did. So I called customer service who then gave me the tracking number because the shipped email was never sent. After about a half hour, the CSR was able to tell me that the shipment had been in the store for 3 days and that I could pick it up. Thankfully, I like the shoes. Also, it seems they shipped to store by UPS. Somehow, that seems wasteful when it's your own store.
Is this typical behavior for Sears online orders?
Been trying to get a refund for the Extended Warranty for the appliances for a month now, I had to call in maybe 4 times, go in-store 2 or 3 times and it isn't refunded yet, always excuses and excuses...
Now I have been paying for 2 months (Sears loan 0% interest/24 months) for a fridge and a dishwasher that they don't even have in stock, they knew for 3 months in advance that the delivery was schedulded on june 30th...
This is the worst service I have been involved with, totally disrespectful of the client.. Anyways, try to get refunded that warranty ASAP because they won't honour it if they close doors. But good luck with all the phone calls you will have to make and all the time ou will loose arguing with them to get what you want as a Customer.
The Bay is definitely better than Sears (Canada or US versions) and slightly better than JC Penny ... Which i see as only slightly better than Sears.
But it does not even come close to any US Dept Store when it comes to quantity of goods on display (my local Bay could easily double as a bowling alley these days)
The Bay tries very hard to be a classy Dept Store in Canada, but falls short of Macy's... Definitely in selection, layout / presentation... And often in pricing.
We could happily shop everyday at Macy's in the USA, and find quality merchandise at a good price 75% or more (3 Sales cycles out of 4 in a month) whereas at The Bay, I would be hard pressed to find similar results 25% to 50% of the time.
IMO no where is this more apparent than in Housewares, Clothing, Shoes, Accessories & Jewelery... Which are the Departments where we tend to find the biggest selection & greatest deals when we are stateside. Clothing is especially lagging behind Macy's when it comes to selection. Cannot recall the last time we bought clothes there... Women's clothing at The Bay vs Macy's is partcularly bad. (Wife is buying more & more clothing, shoes & accessories either On Sale or Clearance at Macy's vs here in Canada)
We love Nordstrom, Neaman Marcus, Lords & Taylor as well as Bloomingdales... But they are far more high end / expensive for our taste / budget. Tend to see them "leaning" more towards Holtz & Renfrew. As much as we love walking thru them and browsing,.. They really are out of or price range
long term employees, especially full time (35+hrs a week x 5 years minimum) deserve something..
although..
i was at a very very very well known and country wide retail store for 15 years full time and 'all' i received was 13K.
sad sad sad for everyone involved
long term employees, especially full time (35+hrs a week x 5 years minimum) deserve something..
although..
i was at a very very very well known and country wide retail store for 15 years full time and 'all' i received was 13K.
sad sad sad for everyone involved
I can buy everything from flippa k to J.Lindberg to Ben Sherman to their selected brand, scotch and soda , Hugo boss to Burberry to cheap stuff like Tommy Hilfiger
Same thing with house ware, bed, linens etc
They do lack the really cheap low end stuff that garbage stores in us sell..which I guess the US has better selection of
I found an item from almost 4 years ago about how the local Whole Home store was revamping its setup to appeal to customers during the time Target came to Canada.
https://www.hamiltonnews.com/news-story ... -ancaster/
What happens to Corbeil Appliances, which took over appliance sales in the Whole Home stores? That chain will be shut out of some markets when affected Whole Home stores close down. Corbeil uses its own branded trucks for delivery. No guessing who is driving a mystery white delivery truck for an appliance dropoff as happened when a family member ordered a fridge through a regular Sears mall store.
I disagree with you on the pricing in the US being cheaper than Canada. I've found the opposite, and the selection in the states is far superior than here.
I'll also disagree on Sears being lower class, Wal-Mart is lower class. Sears is middle class, and the Bay trends toward upper class, without hitting the heights of Holt Renfrew, Saks 5th, etc.
Fortunately my wife was able to move her accumulated pension funds to another investment company when she left last year.
https://www.theglobeandmail.com/report- ... e35454179/
Sears’s defined-benefit pension plan has a deficit of almost $267-million, court filings indicate. To make it up, it would need to contribute $3.7-million a month to it, they say. And it has $196-million of liabilities tied to the retirees’ medical, dental and life insurance benefits plan, the filings say.
Since my wife worked for Sears for 18 years, what you wrote was of particular interest to me.
How do you know about your #1?
Our friends who work for Sears have heard nothing.
Pension in particular is based on a separate pension fund governed by pension regulations that have nothing to do with operations. The only way they don't get their pensions is if the fund is drastically underfunded - which may be possible (as with Nortel) but there are laws about that. I haven't heard of any announcements. If there was an announcement about pensions, please point me that way. I'll forward it to our friends that might be affected.
My two cents ...
1) What they're doing with severance (none) and pensions (goodbye) is terrible. Another great example of employees getting screwed over by corporate incompetence.
2) Business types in offices far away from the actual consumers love to think they know what consumers want. They have an MBA so they must know more about people than people know themselves! Data science! Marketing! Performance management and offshoring to reduce costs! Lower pay and more part time for increased 'flex work'! Hilarious garbage. The thing is ... people aren't that stupid. I'm going to shop around. I'm going to go to amazon on my phone. If and when I need an appliance, a big ticket item, I'm going to spend 15mins to do some Googleing and then buy it at the cheapest place with the best customer service / warranty. You sell commodities, not services. Your brand doesn't mean anything. You're a place I go to buy brands.
Older folks used to go by the brand name and price to gauge quality.
It was also assumed that the higher you paid the better the service that came with it.
That's why sears was a defacto go to for their Kenmore brand (and others) and why their business model succeeded.
But brands started to cheapen their own product to appeal to every class and the quality line is completely blurred.
I have a cheap insignia TV that has outlived two major brand name lcd that friends paid much more for.
Sears never noticed the switch in manufacturing strategy (or probably just didn't give a f...) and kept thinking if we sell high, people will come. For reasons beyond my comprehension, apple still gets by on that assumption (maybe average tech consumers are 20 years behind)
But for other commodities times have changed and your device/clothing/accessories can crap out at any time regardless of the price you paid (most of them are even engineered to fail) so what is left? Service! How well the item performs the service for what you purchased it for, how easy it is to test and have it delivered to you and how easy it is to have any issues resolved.
Now, amazon and walmart offers brain dead shopping experience... buy it, try it, you no like, you return, we sorry you no like. They actually have as bad customer service as sears but their system offers most of the information you will ever need but you will find that there is no one to answer your questions if orders gets cancelled (and stuff shows up online few days later at higher price) or your packages gets lost. Look at reviews many times low ratings are caused by poor customer service and have nothing to do with the product.
Plus I don't think that Canada has that much to begin with due to our geographic & demographic issues (the same stuff that folks complain about every day here on RFD)
As for Sears being for the Lower Class ... I disagree.
IMO the Super Discounters are where the poorer folks shop (Value Village - Dollar Store - Walmart etc) ... That and those looking for a BIG bargain
Sears has clearly functioned throughout its history as a Middle Class Dept Store, as did Eaton's, The Bay etc.
Sears was just sort of "everyone's store", folks shopped there for quality goods at a decent price, and once upon a time good service "Satisfaction Guaranteed or Your Money Back"
Yes & No. You really have to know your pricing before shopping in the USA... More so now when you take in the current exchange rate. But there are deals to be found on both sides of the Border (be it clothes, electronics, Jewellery, housewares, food, booze, etc)
Sometimes I find brand name goods at Macy's that is on sale which is a relative steal vs what we pay in Canada for the same thing... And sometimes I skip purchasing anything cause after doing the math, the price is virtually the same in Cdn Dollars... In which case I spend my money here in Canada, and save my US Personal Exemption for something more worthwhile.