Sears Canada will slash about 2900 jobs and close 59 stores in a major restructure, after a court granted it protection from its creditors.
The temporary Companies' Creditors Arrangement Act protection, granted by the Ontario Superior Court of Justice, will enable the retail chain to continue operating while negotiating its future with its creditors, including landlords and suppliers.
In a statement on Thursday, Sears Canada announced it will close 20 of its 94 department stores, 15 of its 23 Sears Home stores and all of its 10 outlets, as well as 14 Sears Hometown locations.
The chain will cut approximately 2900 positions – or 18 percent of its 16,000 staff – at its stores across the country and at its headquarters in Toronto.
It hasn't yet given a timeframe for the closures and job losses.
The department store giant last week warned it may need to be sold – possibly in pieces – amid ongoing losses and plummeting stock, as shoppers increasingly buy online.
Sears says it will work to complete its restructuring as swiftly as possible, hoping to exit court protection before the end of the year “better positioned to capitalize on the opportunities that exist in the Canadian retail marketplace”.
“The brand reinvention work Sears Canada has begun requires a long-term effort,” the company said.
“But the continued liquidity pressures facing the company as well as legacy components of its business are preventing it from making further progress and from restructuring its legacy assets and businesses outside of a CCAA proceeding.”
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