TORONTO—Sears Canada Inc. said it plans to close 59 locations and cut approximately 2,900 jobs under a court-supervised restructuring after it was granted protection from creditors Thursday.
The announcement came after the company was granted temporary protection from creditors under the Companies’ Creditors Arrangement Act (CCAA) by the Ontario Superior Court of Justice.
It marked a culmination of struggles for a company with roots that stretch back generations.
The retailer has piled up losses and seen its stock dive, losing more than 80 per cent of its value in the last year, despite efforts to refashion itself at a time when more Canadians are shirking bricks-and-mortar in favour of online shopping. It has also gone through several leadership changes in recent years.
“The brand reinvention work Sears Canada has begun requires a long-term effort,” Sears Canada said in a statement Thursday.
“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.”
Under the court-supervised plan, Sears Canada will close 20 full-line department stores, 15 Sears Home stores, 10 Sears Outlet stores and 14 Sears Hometown locations. It has also been authorized to obtain up to $450 million in financing to maintain operations throughout the restructuring.
Headquartered in Toronto, Sears Canada has 94 department stores, 23 Sears Home stores and 10 outlets. It said it hopes to exit court protection as soon as possible this year.