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| Sears flagship at the Toronto Eaton Centre |
Sears will close their Toronto Eaton Centre, Sherway
Gardens, and London-Masonville
locations by February 28, 2014.
A year later they will close their stores at Markham's Markville Shopping
Centre and Richmond Centre in British Columbia.
In total 965 associates will be affected by the closures. Sears has said
qualified associates could be offered positions in other stores. All
the malls in question are owned by Cadillac Fairview (except Richmond
Centre which is co-owned with Ivanhoe Cambridge).
"Unlocking the value of assets is one of the three
levers we have said we will use as a way to create total value for the
Company," said incoming Sears CEO Douglas Campbell.
"When proposals such as this one are presented to us, we must weigh the
value of the transaction against the value we will obtain from continuing to
operate those stores in their current locations. In this case, we were
presented with an opportunity that gives us a significant financial benefit
without changing our plans to improve the business and make Sears more relevant
to Canadians. Our primary focus of creating long-term value for the Company is
best approached by focusing on the basics of the business and continuing to
become more relevant with Canadian consumers coast to coast."
Last month former Sears CEO Calvin McDonald resigned from
the retailer in the midst of a three year planned turned around. McDonald focused on key product categories and shed store leases to some high profile
Sears locations. Today's announced closings combined with those previously
announced mark the company's retrenchment from some key urban markets.
"The Company will operate 111 full-line department
stores after Sears vacates these five stores," continued Mr. Campbell,
"which continues to be a substantial retail presence across Canada, especially in suburban and mid-size markets
where Sears plays a major role in the marketplace."
When Sears acquired the bankrupt T. Eaton Company Limited in
1999, it gained entry to a number of prime urban spaces. Prior to that the
retailer had operated primarily in suburban markets. The Toronto Eaton Centre
and Sherway Gardens
stores were both former key Eaton's stores and Sears was reported to have inherited
their advantageous lease rates.
There has been intense media speculation about the future
tenant (or tenants) of the Eaton Centre location with both Nordstrom and La
Maison Simons being touted as most likely.
As part of the deal Sears will retain the upper four floors
of the Eaton Centre location where it maintains its head office.
It was also reported today that Sears Canada's struggling US parent Sears Holdings is considering spinning off their Lands' End and Auto
Center businesses.
