Interesting Canadian perspective on the U.S. Sears effectively announcing that it sees itself going belly up.
‘Turbulent times’ as U.S. parent raises questions about fate of Sears Canada
Marina Strauss, The Globe and Mail, 22 March 2017
Some key quotes for those of you who aren't G&M subscribers:
- Last fall it unveiled new prototype stores – smaller than regular ones – aimed at focusing on its fashion and other key categories in less space, as well as adding groceries. But the initiatives haven’t been enough to reverse its downward spiral.
- But he said Sears Canada’s fourth quarter results, which are expected to be released next month, are “likely awful” so it can “cushion the news with liquidity lined up.”
- With Sears Holdings faltering, joint merchandise procurement is likely to be the biggest issue for Sears Canada, he said. “Also spillover anxiety could further hurt appliance sales in Canada.”
- The landlords all have contingency plans, or are developing potential blueprints, for Sears sites, anticipating potential problems at the department-store retailer, he said. “This is no longer Plan B – it’s Plan C,” Mr. Williams said. “They did their Plan B on Targets.”
- He said Sears Holdings’ move this week to essentially pre-announce that it has serious doubts about whether it can continue as a going concern is a rare step for a retailer to take, signaling that it’s in trouble. The move will make suppliers even more hesitant to ship products to Sears unless they’re paid in full in advance, he said.
- No obvious suitors have emerged for Sears but archrival Hudson’s Bay Co. may want to pick it up at a very low price, he said. “If the price is right I’m sure they would consider it.” [Doubt it, as Sears has already unloaded the valuable real estate and leases that would have interested Richard Baker]
