Sears Canada seeks court approval to liquidate all stores

In this Friday, Nov. 9, 2012, photo, a Sears store is shown in Hialeah, Fla. Shares of Sears Holdings fell Tuesday, Jan. 8, 2013, a day after the retailer announced that chairman and hedge fund billionaire Edward Lampert will take over the role of CEO. The investor queasiness came even as the Hoffman Estates, Ill.-based company offered an update on holiday sales that showed some improvements at its Sears stores. Overall, the company still faces a long, uphill battle to turn itself around. (AP Photo/Alan Diaz)

TORONTO (AP) — Sears Canada Inc. said Tuesday it is seeking court approval to liquidate its roughly 130 remaining stores, leaving approximately 12,000 employees without a job.

The embattled retailer has been operating under the Companies’ Creditors Arrangement Act since June. It said that it had failed to find a buyer that would allow it to continue.

The court overseeing Sears Canada’s operations is expected to hear a motion Friday seeking approval for the liquidation and wind-down of the business.

Sears last week received a revised bid from a group led by its executive chairman Brandon Stranzl to buy the business.

A lawyer for Sears Canada’s court-appointed monitor told the court last week it would consider the bid, but the company was running out of money and time.

On Tuesday, the retailer said in a statement that “following exhaustive efforts, no viable transaction” was made.

The company plans to start liquidation sales no later than Oct. 19 and expects them to continue for 10 to 14 weeks.

Sears Canada currently has 74 full-line locations, eight Sears Home Stores, and roughly 49 Sears Hometown stores, according to Sears Canada spokesman Joel Shaffer.

The retailer has approximately 12,000 employees, three-quarters of whom are part-time, Shaffer added. Of the roughly 800 employees in Sears Canada’s head office, the vast majority will exit next week, he said.

That tally doesn’t include the 2,900 job reductions Sears Canada had announced in June, with the closure of 20 full-line locations, 15 Sears Home stores, 10 Sears Outlet and 14 Sears Hometown locations.

Sears Canada said in the statement Tuesday it “deeply regrets this pending outcome and the resulting loss of jobs and store closures.”

Litigators for a group of lenders who have provided debtor-in-possession financing to Sears Canada to keep it afloat pushed to enter into a liquidation agreement by Oct. 7 at the latest. The lenders pushed for approval no later than Oct. 13, in order to liquidate before the crucial holiday season and maximize value.

The retailer was spun off from Sears Holdings in 2012.