Sears to close 3 stores in Canada, 670 jobs at risk
Published Friday, March 2, 2012 7:14PM EST
Struggling retailer Sears Canada Inc. will close three stores in Vancouver, Calgary and Ottawa after striking a deal with landlord Cadillac Fairview Corporation, which will take back the leases for $170 million.
The move comes as the department store retailer attempts to revamp operations amid declining sales. Sears has already chopped 470 jobs across Canada.
There are 670 employees at the three stores slated to close. Sears Canada spokesman Vincent Power said the retailer will attempt to find jobs for those workers at nearby Sears outlets. Most employees are part time workers so "it's doable" that many affected workers will find jobs, he said.
However, there is no guarantee all workers will find replacement jobs.
In a statement, the retailer said Cadillac Fairview made Sears an offer it couldn't refuse.
Sears Canada Chief Executive Officer Calvin McDonald, who took over the helm last year, put a positive spin on the store closings, saying the deal gives the retailer the cash needed to upgrades other stores.
"Overall, this is a very advantageous agreement for Sears Canada," McDonald said in a statement.
"While we had no plans to close stores, the transaction for these three specific locations provides an attractive financial benefit for the Company which strategically allows us to drive growth in areas which can be most beneficial."
Retail analysts said they're not surprised Sears moved to offload three big-city department stores.
It's no secret Sears has struggled over the past year as it faces competition from discount retailers Wal-Mart and Winners. Next year, U.S. discount retailer Target Corp. will open a string of outlets across Canada.
Sears Canada may be following the example of its U.S. parent company, Sears Holdings, which has closed stores south of the border.
"From Sears' point of view, it was perhaps a matter of the right opportunity coming along at the right time," Ed Strapagiel told CTV.ca.
"This may be serendipity. Cadillac Fairview put this offer on the table probably knowing that Sears was struggling and would be receptive to this deal.
"And Sears gets $170 million, which is not chicken feed."
Strapagiel said Sears has talked a lot about rebranding, but the look of the stores hasn't changed much in years.
"Sears hasn't put a dime into their stores in many years," Strapagiel said.
"They've been kind of at sea in terms of what they stand for in the Canadian marketplace and what they mean for Canadian consumers. They haven't done a good job of . . . cutting out their piece of the market."
Last year, McDonald attempted to streamline Sears' operations by focusing on house wares and furniture. And last month, he slashed prices on thousands of store items.
It's still not known who will take over the leases in Vancouver, Calgary and Ottawa, though Strapagiel said he's certain Cadillac Fairview has retailers on standby.
"You don't get rid of a tenant unless you have whoever's moving in right behind you."
In the past, U.S. department store chain Nordstrom has said it wants into the Canadian retail market,