Sears Canada closing stores, cutting jobs as part of restructuring

Sears Canada is looking to reinvent itself.



The long-struggling department store retailer said it expects to close 59 of its 225 stores and cut 2,900 of its approximately 17,000 workers as part of its restructuring. Sears Canada filed for protection from its creditors under Canada's Companies' Creditors Arrangement Act, the equivalent of Chapter 11 bankruptcy, on Thursday.



The retailer said it plans to exit bankruptcy "protection as soon as possible in 2017, better positioned to capitalize on the opportunities that exist in the Canadian retail marketplace." Sears Canada was spun off as an independent company from Sears Holdings in 2012. However, Sears Holdings CEO Eddie Lampert and his ESL Investments hedge fund own an approximate 45% stake in the company. And Sears Holdings owns another 12% of the Canadian retailer.



Sears Canada will close 20 of its full-line stores, 15 Sears Home Stores, 10 outlet stores and 14 Sears Hometown locations. All other Sears locations will remain open, and the company "plans to continue to operate a large number of stores, continue to maintain significant employment, and to service its customers across Canada," the retailer said in a court filing.



Sears Canada has been ailing for years, burdened with an outdated image and under increased competition from online and discounters. It has racked up five years of operating lossesIn early June, the company issued a warning about there being significant doubt whether it could stay in business, noting that “cash and forecasted cash flows from operations are not expected to be sufficient to meet obligations coming due over the next 12 months.”