Sears Canada announced Friday it will be closing its Pacific Centre location in Downtown Vancouver this year along with the Chinook Centre location in Calgary and Ottawa Rideau Centre.
The company announced it will return to commercial real estate developer and landlord, The Cadillac Fairview Corporation Limited, the three stores within shopping centres the developer owns and manages, for $170 million.
The transaction is expected to close on or around April 20, said the company.
Sears plans to exit all three locations by October 31.
“Overall, this is a very advantageous agreement for Sears Canada,” said Calvin McDonald, President and Chief executive, Sears Canada Inc., in a statement. “While we had no plans to close stores, the transaction for these three specific locations provides an attractive financial benefit for the Company which strategically allows us to drive growth in areas which can be most beneficial. We are investing in a refresh of our stores and piloting new formats which will provide Canadians exciting ways to access Sears products and services. This is an opportunity for Sears Canada that fits well with our vision and where our strengths are as a retailer.
“Sears continues to execute its transformation strategy and remains focused on growing the business. We will continue to unveil new customer-focused strategies and events that demonstrate our resolve in being top of mind for shoppers across the country.”
“They had a leadership change in Canada and, you know, part of the change is that they’re just being very, very careful with cash now,” said Morningstar analyst Paul Swinand, who noted that Sears Holdings is also watching its cash.
Sears Canada’s chief executive, Calvin McDonald, joined the company in June 2011.
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“While we had no plans to close stores, the transaction for these three specific locations provides an attractive financial benefit,” McDonald said in a statement.
Sears Holdings, which owns 94.7 per cent of Sears Canada according to Thomson Reuters data, said late last month it would raise about $770 million by spinning off parts of its business and selling prime real estate.
That announcement helped reassure Wall Street that the retailer had enough assets to tap to pay down debt, sending its shares up nearly 19 per cent.
Both companies have struggled with falling sales. In early February, Sears Canada cut regular prices on more than 5,000 products, part of a “transformation” to help it compete more effectively.
Shares of Sears Canada rose 5.2 per cent to C$12.83 on Friday morning on the Toronto Stock Exchange.
Sears has operated in Vancouver Pacific Centre and Ottawa Rideau Centre since 2000 and in Calgary Chinook Centre since 1965.
Sears Canada has 196 corporate stores, 285 hometown dealer stores, 30 home services showrooms, over 1,700 catalogue merchandise pickup locations, 108 Sears Travel offices and a nationwide home maintenance, repair, and installation network.
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