Fears Mounting for Sears Holdings as Sears Canada Liquidates All Stores
Sears Holdings Corp (NASDAQ:SHLD) closed an iconic 65-year-old store in Houston on Wednesday. But the company made international headlines for a bigger reason. Wednesday was the day of reckoning for the company’s spin-off north of the border.
Sears Canada finally announced that the company would be permanently going out of business. The company is now seeking court approval to liquidate all of its stores and lay off all of its employees. About 12,000 Canadians will become jobless after Sears Canada closes about 130 stores.
Fears are now building that the U.S. parent may end up meeting the same fate. The U.S.-based Sears is a principal shareholder in Sears Canada. The CEO of Sears Holdings, Eddie Lampert, is personally invested in Sears Canada. To say that the two companies are separate couldn’t be more wrong.
Sears Holdings has already closed about 180 stores across the U.S., and is continually adding to that number. An additional 150 Sears stores are expected to close before the end of this year.
Lampert has confirmed that the U.S. company is not only getting rid of all its underperforming stores, but also reducing the size of its remaining stores in order to save costs.
The department store chain, which has been around for well over a century, began losing money in recent years as it failed to adapt to the changing retail landscape. American consumers began trending toward digital retail earlier over the past decade, as online retailers, particularly the likes of Amazon.com, Inc. (NASDAQ:AMZN), began offering competitive prices and quick delivery services.
Retailers like Sears, which failed to see the rising dominance of e-commerce and did not evolve with shifting consumer tastes, are now finding it hard to keep their businesses up and running.
The failure of Sears Canada has investors worried that the American retailer may be heading down the same track. The demise of Sears Holdings would probably do more damage to the retail jobs market than to the investor community. Hundreds of Sears employees have already lost their jobs amid the ongoing store closures, but thousands more could follow if Sears continues shutting down stores.
“Sears to close iconic Midtown location,” Chron, October 10, 2017.
“Sears Canada closing all of its stores,” CNN Money, October 10, 2017.