Sears Canada is set to close 59 stores and axe 2,900 positions as part of a court-supervised restructuring plan.
The move comes after the retailer secured temporary indemnity from creditors from the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (CCAA).
The closures include 20 full-line locations, 15 Sears Home Stores and ten Sears Outlets, as well as 14 Sears Hometown locations.
According to the court order, Sears Canada will be able to secure debtor-in-possession financing of C$450m ($338.54m), which is expected to provide the company the financial wherewithal to continue operations throughout the restructuring process.
The company noted that it has been engaged in business reinvention over the last 18 months and persisting liquidity pressures have compelled it to approach the court for creditor protection under the CCAA.
Under the reinvention programme, the company underwent changes with regard to its front and back-end technology platform, redefined its brand positioning and upgraded its product portfolio.
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Sears Canada aims to exit CCAA protection as soon as possible this year, in order to capitalise on the opportunities in the Canadian retail marketplace.
The creditor protection is valid for an initial period of 30 days, with a option of further extension.
Sears Canada currently operates 140 corporate stores, including full-line, Sears Home and Outlet stores, 71 Hometown stores, as well as more than 900 catalogue and online merchandise pick-up locations.
Image: Sears in Fairview Mall. Photo: courtesy of Raysonho@Open Grid Scheduler via Grid Engine via Wikipedia.