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HOFFMAN ESTATES, Ill. — Sears Holdings Corp. announced on May 14 that it is “exploring strategic alternatives” for its 51% interest in Sears Canada, including potential sale of the entire Canadian enterprise.
Sears Holdings Corp. announced on May 14 that it is “exploring strategic alternatives” for its 51% interest in Sears Canada, including potential sale of the entire Canadian enterprise.
The parent company, controlled by hedge fund billionaire Edward Lampert, said Sears Canada’s board and management "intend to cooperate fully with Sears Holdings in this process to achieve value for all shareholders."
Sears Canada sold off seven store leases in recent months and laid off 2,600 workers in response to six consecutive years of declining sales.
Sears Canada owns 14 department stores and leases 96 others. It has two Sears Home outlets as well as several distribution centers and related businesses.
Sears began doing business in Canada in 1953.
Lampert gained control of Kmart Corp. in 2003 after the company emerged from bankruptcy protection, then combined it with Sears in an $11.5 billion deal.
Lampert, Sears’ largest shareholder, took over as chief executive officer in February 2013 and has been under pressure to turn the business around. Several years of operating losses forced Lampert to sell real estate and pieces of the Sears empire, including the recent spin-off of Lands’ End, to raise cash needed to shore up the retailer’s core Sears and Kmart stores. Sears is also investing in e-commerce and its Shop Your Way rewards program.
Pension funds or private equity firms might take a look at the Canadian assets, analysts said, and the stores could draw interest from retailers, especially those in Asia or Europe looking to enter Canada or expand their footprints there.
