Sears Canada said Tuesday it plans to seek court approval to begin liquidation of all of its remaining stores and assets, a move that would see about 130 outlets close and put about 12,000 employees out of work.
"Sears Canada, with the recommendation of its advisers and approval of the monitor, FTI Consulting Inc., is seeking an order to commence a liquidation that would result in a wind-down of its business following court approval," Sears Canada said in a release.
"The company deeply regrets this pending outcome and the resulting loss of jobs and store closures," the retailer said.
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Sears Canada said that if it gets court approval to begin the process, it expects that liquidation sales at its stores would start no earlier than Oct. 19 and continue for 10 to 14 weeks.
"We have said this before, but it is worth repeating — the actions being taken are a reflection on the state of the retail market today, not your efforts or your contributions to the company, which have been greatly appreciated," Sears executive vice-president Becky Penrice said in a letter to employees.
"You and our former colleagues have stuck by us and continued to give it your all. I sincerely regret that we have reached this point," Penrice said in the letter.
Sears Canada has been in court-approved creditor protection since June 22.
After it was granted protection, Sears received permission from the court to seek out a buyer or investors.
Hope for a potential buyer resided in a bid led by Canada's executive chairman, Brandon Stranzl, who pledged to keep Sears in operation and save thousands of jobs.
However, the company said Tuesday that "following exhaustive efforts, no viable transaction for the company to continue as a going concern was received."
'End of an era'
Bruce Winder, co-founder and partner at Retail Advisors Network, said it appears that "the odds are quite low that someone is going to swoop in and save Sears, unfortunately."
Winder added: "It is the end of an era, because Sears was once one of the most important and largest retailers in Canada and in North America."
The company announced in June that it would be closing almost 60 stores.
Last week, it received court approval to close 11 other stores. At that court hearing, a lawyer for FTI Consulting warned that Sears Canada was running out of time and money.
At the same hearing, a lawyer for the lenders that provided the retailer with financing while it is in creditor protection said that if a buyer couldn't be found, then it would be key to liquidate before the Christmas season is over in order to maximize the value the process could generate.