Sears Canada Inc. will liquidate its assets and begin to “wind down” after its board rejected a business plan proposed by the company’s top executive, The Wall Street Journal reports.
The board’s decision to liquidate most of the Canadian retailer’s assets comes after Brandon Stranzl, the executive chairman of Sears Canada, was unable to garner support for a private-equity-backed deal. He proposed a leaner version of the company that would have enabled it to emerge from bankruptcy and saved approximately 8,000 jobs.
Since 2014, the company has been operating at a loss and in June, it filed for bankruptcy protection. In the company’s annual financial report, it expressed “significant doubt” regarding its ability to continue operating. Sears Canada’s approximately 13,000 employees were told Tuesday that most will lose their jobs.
“Following exhaustive efforts, no viable transaction for the company to continue as a going concern was received,” Sears Canada says in a statement. “The company deeply regrets this pending outcome and the resulting loss of jobs and store closures.”
The Ontario Superior Court of Justice is scheduled to hear Sears Canada’s liquidation request on Oct. 13. If the company’s request is approved, liquidation sales could begin as early as Oct. 19 and continue for 14 weeks, the article states.
Sears Canada was once “one of the largest multiformat retailers in Canada,” the Journal reports, but it struggled to compete against long-standing Canadian brands like Hudson’s Bay Co. According to the article, it faced a public relations backlash after it paid roughly $6 million in bonus payments to executives but did not provide severance to laid-off employees.
The board of Sears Canada rejected Stranzl’s proposed business plan based on concerns that it would take too long to implement and might not be ready in time for the holiday shopping season. The board decided ultimately to approve a liquidation plan that will sell most of the retailer’s assets for roughly $240 million, the Journal reports.