Company says it received no viable transaction to keep it in business
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(Reuters) - Sears Canada will seek court approval to liquidate all its remaining stores and assets after the 65-year-old retail chain failed to reach an agreement to continue to operate.
Sears Canada has lost market share and struggled to remain relevant to shoppers who have switched to stores that keep up with fast-changing fashion trends. Its sales have fallen every quarter since it was spun off from Sears Holdings in 2012. The company had been in negotiations with executive chairman Brandon Stranzl, who stepped away from day-to-day operations to come up with a proposal to keep the company afloat.
But the company received no viable transaction to keep it in business, it said in a statement on Tuesday.
Therefore, "Sears Canada, with the recommendation of its advisors and approval of the (court-appointed) monitor, FTI Consulting, is seeking an order to commence a liquidation that would result in a wind-down of its business following court approval," the Toronto-based company said.
The Ontario Superior Court of Justice is expected to hear the motion to liquidate on Friday, the company said, and it expects liquidation sales to begin on about Oct. 19 and continue for 10 to 14 weeks.
It filed for creditor protection in June and laid out a restructuring plan that included cutting 2,900 jobs and closing roughly a quarter of its stores.
The company last week won court approval to close 11 stores and sell some businesses, and to extend creditor protection to Nov. 7.
But its lenders required it to enter into liquidation agreements for the rest of its assets by Oct. 7, agreeing with FTI Consulting that they would recover more through liquidation than a deal to keep it operating.
