After expressing “significant doubt” about its future earlier this month, Sears Canada has announced it will close 59 of its stores and lay off 2,900 workers as part of its restructuring plan.
The move comes after the company announced it applied to the Ontario Superior Court of Justice (Commercial List) for protection under the Companies’ Creditors Arrangement Act.
“The Sears Canada Group will work to complete its restructuring in a timely fashion and hopes to exit CCAA protection as soon as possible in 2017, better positioned to capitalize on the opportunities that exist in the Canadian retail marketplace,” said the company in a release.
And while no specific dates were mentioned regarding the closures, Sears noted that all its other stores will stay open and the its online business will be maintained as well.
The decision is a result of company concerns around the inability to overcome the challenging retail marketplace and continue with its reinvention plan, which began last year and included a new logo.
Its net loss for the first quarter was $144.4 million, more than double during the same period last year. As well, revenues have dropped by approximately $90 million to $505.5 million, representing a decline of 15.2%.
It blames three factors for the most recent losses: