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

Tyler Durden's picture

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, as Bloomberg reports, 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 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.

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jcaz's picture

More Tim Horton workers- sweet.

Bud Dry's picture

But...  but...  the economy...

Jeffersonian Liberal's picture

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.

Raffie's picture

where will Canadians by the hottest fashionable cloths now?

In.Sip.ient's picture



Canadians and fashionable?  Where?

As in; which town are you talking about?



karenm's picture

"12,000 jobs may not sound like much but that's roughly how many jobs Canada adds to its economy each month"


LOL!! Now even ZH believes the Bull Shit Government Propaganda 

wisehiney's picture

140,000 U.S. next.

Son of Loki's picture

Instead of National Propaganda radio having immigrants crying on their station, they should try having hard working Americans who have either lost their jobs due to Obama exporting all their factories to China and Bangladesh, or focus on Americans who are crying because they can't get access to health care on Obamacare.


That would be nice for a change. An American radio station!

American Psycho's picture

but but but that doesn't support the narrative. 

Jeffersonian Liberal's picture

But then NPR wouldn't be National Propaganda Radio and PBS wouldn't be the Propaganda Broadcasting Service.

Glad so many people are now using the terms I've been using for 20 years. You can't imagine the looks I've gotten over the years when I refer to them that way.

King of Ruperts Land's picture

In Canada its the CBC, the Communist Broadcatsting Cucks.

asteroids's picture

Eddie asset stripped the company. Loaded it with debt until it was forced to collapse. Fucking vulture would rather sell off the parts for every fucking dollar than do the morally correct thing. Sell it for $1 and step aside.

Rockatanski's picture


i sure hope so because sears is not worthy of a restructure. they just need to fade away like the pinto.

Blue Dog's picture

No, they're not losing the war with Amazon. That's fake news. Online sales only account for 8.5% of total retail sales. It's ultimately a failure of socialism. The economies around the world are shrinking. People have less money to spend. More and more store closures are coming. And it's not due to increases in sales on Amazon.

silverer's picture

I think you have a good point. The move to Amazon for many was because it saved them a bit of money or it was very convenient. The money squeeze is the bigger factor.

peopledontwanttruth's picture

There's no real economy left. Just how much more crap can people buy. We have an abundance of houses, cars, appliances, clothing, shoes and textiles sitting everywhere. People are broke and as the consumer based economies die so will the producers without an end user.

This is another reason they keep pushing for a war.

Crazy Or Not's picture

It's really not hard to figure this. Global freight has collapsed, as has the containers that carried it.
Middle class have turned into bottom feeders so now buy on Gear Best etc direct from China (via proxy) or prolls via Amazon...
Game over  

yogibear's picture

Bullish, good for another 500 points on the DOW!

Becoming obvious of no rate hike in December.

afronaut's picture

Funny I have more money but now there's nothing interesting to buy

silverer's picture

Well, I guess those folks can also forget about the lumber industry when they go job hunting.

True Blue's picture

Ironic that the company that pioneered the concept of buying from home and having your goods delivered became so engrossed in bricks and mortar that they lost their ass to a company that lets people buy from home and have the products delivered.

hannah's picture

the problem is that amazon has never made a profit....more and more retailers fade away and amazon cant make a profit. this isnt about bricks/motor versus ecom...the economy id dead for more credit for you!

yogibear's picture

See how the Fed is cooling on a rate hike?

U4 eee aaa's picture

What a difference a colon makes :)

U4 eee aaa's picture

More news out of the Van RE market too.

I guess this is as close as they get to fessin' up

bluskyes's picture

Of course the government will do a thorough investigation (once the cash dries up)

How does the Canadian Revenue Agency investigate "charity casinos" ultimately run by the government?'s picture

Time to tighten up the Northern border security, eh?

venturen's picture

This is what Happens when a HEDGE FUND MANAGER RUNS THINGS

Pumpkin's picture

So you're working for Sears, waiting for the bodies to drop and suddenly you're supprised?'s picture

Amazon may work for the technologically challenged who are willing to pay 20-80% more for the same thing available at eBay.  Better than average website, but, I can't justify the additional cost.

Rentier88's picture

Really depends about 40% time is cheaper on Amazon. Like grey market camera lens etc.  I do shop both sites and other before buying. 


Amazon had cheapest price on 55p607 TLC TV I just got.

King of Ruperts Land's picture

When Amazon is the only store, who will it be cheaper or more convenient than then? And what about targeted pricing. Amazon can set your individual price as high as they know you will pay, as the average Sally lets the corporations see every single card they are holding. "I have nothing to hide" says Dumb schmuck as they get "points".

Rentier88's picture

I don't shop from my home PC, but behind very large network. I price shop so setting the price higher than others only screws themselves. Also walmart is starting to eat Amazon.

King of Ruperts Land's picture

Good going. We should all surf behind annonymizing proxies.

dark pools of soros's picture

eBay is shit... mainly since shipping is a screw job and eBay rapes you on fees.. thats why you see more stuff just pushed to the curb in neighborhoods.. not worth the trouble in selling anything

Pollygotacracker's picture

If the items you are selling are small and lightweight, eBay can be O.K. But, shipping is so expensive, for many items it just isn't worth the effort. I agree. I think that going forward, eBay is in big trouble. The young kids are not collectors. They don't purchase antiques, pottery, coins, stamps, or even vintage jewelry. They don't care how they look so nice clothing is out. I don't think eBay can continue by simply selling phones.

hannah's picture

you can buy a refurb pc for $19 and pay $40 shipping on ebay. thatisnt a deal. amazon has free shipping and the prices are equal or cheaper than ebay. ebay is full of crap chinese knockoffs also....i havent bought anything off ebay for years.....

Barney08's picture

What a total shitshow from the word go!

Rentier88's picture

ABOUT TIME...!  FU Sears! Ever since they screwed this little guy inventor over I refused to set foot in their shitty stores.

Jack Oliver's picture

Not only do the Rothschild's want a 'one world' currency - seems they want 'one world' shopping ( Amazon )

In which case - they would control FUCKING everything !!!

All part of their 'creative destruction' economic plan !!

aliens is here's picture

I hope Sears in the USA will be next. I am tired of hearing news about them.

GunnyG's picture

Where are all of the Muslims Trudeau is importing going to work? Who is going to pay for all of that free wonderful health care in Canuckistani? 

afronaut's picture

They get jobs in the government at the federal, provincial, and municipal level, with pensions. That's how fucked the feminist multiculti governments are. See? At least they work. We told you that they were not gonna stay on welfare forever. SAME thing morons!

directaction's picture

Let them work at Amazon, who cares?

King of Ruperts Land's picture

I am sure toxic masculinity is to blame.

Canada is a failed state walking. It was going to fail into the open arms of Globalism but now that is uncertain. Need for a northern fence is rising. Sounds like Canada won't have enough money to pay for it.