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Starting March 21, Petcetera is marking down all merchandise up to 70 per cent. ((CBC))

Canadian pet store chain Petcetera is filing for creditor protection and liquidating its inventory to generate cash flow.

The Canadian-owned company, which employs 1,600 people at 49 locations across the country, said Friday it is offering discounts of up to 70 per cent on all merchandise as it restructures under bankruptcy-court protection.

Petcetera, which sells pet food and related products, will review all areas of its business, including store numbers and locations, the firm said in a release.

The worldwide recession has forced the company to "take drastic measures in the short term to ensure that Petcetera continues to be viable long after the downturn is over," said CEO Dan Urbani.

James Brander, an economist with UBC's Sauder School of Business, said the company is essentially buying time.

"It's trying to sell off some inventory, trying to generate some cash [and] basically trying to fix itself up so it can survive in the long run," Brander said.

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Petcetera employee Tisha Anderson says she hasn't been told the company is going out of business. ((CBC))

Employees like Tisha Anderson are confident the company will survive.

"We haven't been told the company is going out of business. I know a lot of people have been coming in asking if the company is going bankrupt. That is not the communication we've been given," she said.