Sears Canada to close stores, cut jobs in restructuring

Tuesday, 27 June 2017 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Sears Canada Inc said it plans to cut jobs and close about a quarter of its stores as it restructures its operations after a steady decline in sales due to competition from big-box retailers and online merchants.

Like many department stores, the Toronto-based company has struggled for years to attract fashion-conscious shoppers who have embraced apparel stores more adept at keeping up with fast-changing clothing trends.

The company, which in 2012 was spun off from US department store pioneer Sears Holdings Corp, said it planned to close 59 of its 225 stores and cut 2,900 of its 17,000 workers as part of a restructuring approved by an Ontario bankruptcy court last week.

Sears Canada also plans to file a motion to request permission to suspend certain monthly payments to its pension plan because it is running low on cash, according to court documents.

It also intends to stop payments to a post-retirement benefit plan providing retirees with life insurance and medical and dental benefits, according to the filing.

Retail experts said they were not convinced the company would succeed in its effort to remain in business, but noted that it could get more for its assets by winding down its operations in several phases, rather than pulling the plug through a liquidation.