Weekend Reads 'Sears is doomed': Why former execs doubt troubled retailer can survive

14:07  05 october  2017
14:07  05 october  2017 Source:   cbc.ca

Sears Canada employee hardship fund missing $200K

  Sears Canada employee hardship fund missing $200K A $500,000 hardship fund created for former Sears Canada employees is facing a possible $200,000 shortfall, according to court documents. A $500,000 hardship fund created for former Sears Canada employees is facing a possible $200,000 shortfall, The problem appears to be with a Sears executive who pledged to donate the $200,000 from a retention bonus, but may now be hesitating to cough up the cash.

But behind the hip outfits hides a troubled retailer whose days may be numbered. " Sears is doomed ," says Mark Cohen, who served as Sears Canada's CEO from 2001 to 2004. She questions how the company can survive without the properties.

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Check out Sears Canada on Facebook and all appears well as young, cheerful models promote down vests for fall and skinny jeans.

But behind the hip outfits hides a troubled retailer whose days may be numbered.

On Wednesday, Sears Canada got court approval to close 11 more stores. © CBC On Wednesday, Sears Canada got court approval to close 11 more stores.

"Sears is doomed," says Mark Cohen, who served as Sears Canada's CEO from 2001 to 2004.

Time is running out for Sears Canada and some retail experts believe it has already run out. © Brian Higgins/CBC Time is running out for Sears Canada and some retail experts believe it has already run out.

"The company is toast. It's gone. It's not coming back."

For starters, Sears Canada is hemorrhaging money and could begin a total liquidation of the business this month if the only bid to buy the beleaguered retailer falls through.

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' Sears is doomed ': Why former execs doubt troubled retailer can survive read comments. Las Vegas gunman's secret life thwarts investigators' hunt for motive video. Phoenix creators helped build failed pay system's business case.

' Sears is doomed ': Why former execs doubt troubled retailer can survive read comments.

A report from the court monitor overseeing the retailer's insolvency proceedings even outlines the most lucrative time for liquidation sales: "Before and during the lead up to the December holiday season."

The only hope now to keep the company alive is the bid led by Sears Canada's executive chairman, Brandon Stranzl. He pledges to keep Sears in operation and save thousands of jobs. The retailer currently employs about 11,500 people.

Stranzl's previous offers were rejected and Sears has until Oct. 13 to hammer out a deal with him.

Sears announced in June it was closing 58 stores and laying off 3,100 staff as part of a court-supervised restructuring process. © CBC Sears announced in June it was closing 58 stores and laying off 3,100 staff as part of a court-supervised restructuring process.

But some retail experts predict even if Stranzl manages to buy Sears, the department store chain has been so beaten down, it will still fail.

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  'A complete joke': Laid-off Sears workers say hardship fund cash amounts to nothing after EI cut Laid-off Sears Canada workers say the hardship fund set up to help them is pointless because any payout counts as income and is deducted from their employment insurance benefits. define("homepageFinanceIndices", ["c.deferred"], function () { var quotesInArticleFormCode = "PRMQAP"; var config = {}; config.indexdetailsurl = "/en-ca/money/indexdetails"; config.stockdetailsurl = "/en-ca/money/stockdetails"; config.funddetailsurl = "/en-ca/money/funddetails"; config.etfdetailsurl = "/en-ca/money/etfdetails"; config.recentquotesurl = "/en-ca/money/getrecentquotes"; config.

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"There are crumbs left," says Cohen, who is now director of retail studies at Columbia University's graduate business school. "This process of hollowing out Sears Canada has been going on for some time — for years. The company has basically sawed its legs off."

Selling off the best stuff

Parent company Sears, Roebuck and Co. set up shop in Canada in 1952 and won over customers with its mail-order catalogue and iconic department stores. But the retail landscape has changed and critics say Sears has failed to keep up.

In a desperate bid to reinvent itself, cash-strapped Sears announced in June it was closing 58 stores and laying off 3,100 staff as part of a court-supervised restructuring process.

On Wednesday, the court approved Sears' plan to sell off some of its most valuable possessions such as its subsidiary, Corbeil Appliances, plus 11 more stores including flagship department stores.

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  12,000 Sears Canada employees to lose jobs Sears Canada Inc. has decided to shut its doors and is seeking approval to liquidate its roughly 130 remaining stores — leaving another 12,000 employees across the country without a job. define("homepageFinanceIndices", ["c.deferred"], function () { var quotesInArticleFormCode = "PRMQAP"; var config = {}; config.indexdetailsurl = "/en-ca/money/indexdetails"; config.stockdetailsurl = "/en-ca/money/stockdetails"; config.funddetailsurl = "/en-ca/money/funddetails"; config.etfdetailsurl = "/en-ca/money/etfdetails"; config.recentquotesurl = "/en-ca/money/getrecentquotes"; config.

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"They're selling the most profitable assets they have," says Armance Bartold, a former Toronto-based vice-president of planning for Sears. "What's Brandon [Stranzl] going to work from?"

Bartold worked at Sears from 2012 to 2015, but was recruited to return to the retailer in 2016 to help Stranzl rebrand the ailing department store. She was laid off when Sears became insolvent in June.

Bartold says some of the stores that are closing such as those at Oakville Place, Fairview Mall and Scarborough Town Centre in the Toronto region are popular locations that Stranzl invested time and money to modernize as part of Sears' reinvention. She questions how the company can survive without the properties.

"To get rid of the stores that they've been focusing on, that doesn't make any sense because that was part of [Stranzl's] crown jewels," she says. "Those stores had the traffic, those stores had the fixtures, those stores had everything in the best locations."

Lost shoppers

Bartold says another problem is that Sears Canada, which has been losing customers for years, has recently managed to alienate even more shoppers. That's because as part of the restructuring process, laid-off staff aren't receiving severance, and retiree pension payments may be reduced.

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The plight of the employees has upset many Canadians, some of whom started calling for a Sears boycott on social media. Sears' Facebook site was flooded with angry comments until July when the retailer stopped allowing public posts.

"Through this whole process, they've lost a lot of customers," Bartold says.

Given all that Sears has already lost, Cohen says, "under what circumstances could the company possibly be successful?"

He believes if Stranzl had the ability to save Sears from sinking, he would have done so before the retailer became insolvent.

At this point, Cohen predicts that if Stranzl's bid is approved, all he'll be able to do is delay the inevitable — total liquidation.

"This is a bad movie with a bad ending that never changes," he says.

A source close to the bid process, however, told CBC News that Stranzl has a comprehensive plan to save Sears that is backed by a major financial institution.

He claims approving Stranzl's bid is "the right decision to save jobs and save Sears Canada from liquidation."

Sears Canada granted approval to liquidate .
TORONTO - Sears Canada has received court approval to proceed with a full liquidation of its remaining stores, signalling the end of an era for a 65-year-old chain that was once a staple at malls across the country. Ontario Superior Court heard Friday that after weeks of discussion and a bid from the company's executive chairman, no viable buyer has been found. The move will put 12,000 of its employees out of a job. Justice Glenn Hainey approved Sears Canada's motion to liquidate its remaining 130 stores, and said he was satisfied that there was no viable alternative following a months-long saga stemming from the embattled retailer's decision to seek protection from its cr

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