Total liquidation is looming ever closer for Sears Canada
Time to save Sears Canada from total liquidation and closure is quickly running out, as they have until October 13th to re-asses the takeover bid put forth by Brandon Stranzl.
In an effort to keep the drowning business afloat, Sears Canada has successfully requested continued creditor support through till November 7th. Additionally the courts approved the closure of another 11 stores located in British Columbia, Manitoba, Ontario, Quebec, and Newfoundland. These closures will result in the dismissal of another 1200 employees.
However, even if Stranzl’s bid is successful, past executives are doubtful that the brand will stay alive.
"Sears is doomed," said Mark Cohen, former Sears Canada CEO. "The company is toast. It's gone. It's not coming back."
Cohen, who served at Sears Canada’s CEO between 2001 and 2004 is now the director of retail studies at Columbia University’s graduate business school.
"There are crumbs left," Cohen said. "This process of hollowing out Sears Canada has been going on for some time — for years. The company has basically sawed its legs off. This is a bad movie with a bad ending that never changes.”
Stranzl maintains that it is imperative to keep the business running and save the remaining 11,000+ jobs that Sear Canada provides.
Former Toronto area vice-president of planning for Sears Canada, Armance Bartold, is weary as the newest effort to save the business included the closure of many key stores.
"They're selling the most profitable assets they have," said Bartold. "What's Brandon Stranzl going to work from? To get rid of the stores that they've been focusing on, that doesn't make any sense because that was part of Stranzl's crown jewels. Those stores had the traffic, those stores had the fixtures, those stores had everything in the best locations."
Even more than the store closures, the perception of the brand has taken a turn for the worse, especially in light of the most recent controversy surrounding the Sears Canada hardship fund. Bartold is worried that how Sears Canada has handled themselves during this time has pushed away customers and former employees, and that both are unlikely to come back if the bid goes through.
"Through this whole process, they've lost a lot of customers." Bartold said.
As per the new agreement put forth earlier this week, the Canadian retailer has until October 7th to sign a liquidation agreement, which must be approved by the courts by October 13th. If Stranzl’s bid is not accepted, the liquidation process for the remaining open Sears Canada stores could start as early as October 19th.