From Home Furnishing Business
Sears Canada Seeks Protection from Creditors
Struggling retailer Sears Canada said Thursday it has filed for protection from creditors under the Companies’ Creditors Arrangement Act in order to continue restructuring its business.
The action is the equivalent of a Chapter 11 bankruptcy filing in the United States.
The retailer denied recent media reports that it intended to sell its assets and cease operations, noting that a restructuring that began 18 months ago “has now begun to gain traction with customers.”
“The company's hard work to bring its vision to reality is reflected in reported growth in same store sales in its two most recently completed quarters,” the company said in a statement announcing the CCCA filing. “Sears Canada believes this indicates that the new brand positioning is starting to resonate with consumers.
“The brand reinvention work Sears Canada has begun requires a long-term effort, 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.”
Sears Canada is the largest mattress retailer in the country, and one of Canada’s biggest furniture retailers. It operates as a licensee of U.S.-based Sears Holdings, although Sears Holdings owns about 11.7% of the retailer’s stock. Another 45.3% is owned by an investment fund controlled by Sears Holdings Chairman Edward Lampert.
The retailer operates about 90 full-line department stores, and about 95 other smaller-format stores under the Sears Home and Sears Hometown labels.