When Sears Canada filed for insolvency on June 22, it said the point of seeking creditor protection was to re-invent itself. But as the company’s corporate restructuring takes form, its public image is taking a beating, retail and brand experts warn.
The struggling retailer’s decision to lay off to lay off 2,900 employees without severance likely struck a chord with a chunk of its customer base, said Maureen Atkinson, senior partner at J.C. Williams Group, a global retail adviser.
READ MORE: 2,900 Sears Canada employees won’t receive severance after layoff
Many Sears customers are “people who would identify with not getting severance when they’re laid off,” Atkinson told Global News.
WATCH: What rights do Sears employees have?
The company also filed a motion to stop some pension and post-retirement benefits payments, though it agreed Thursday to maintain that funding until the end of September.
READ MORE: Sears Canada reaches compromise over pension payments, health benefits as company restructures
Both announcements prompted people to take to social media, vowing to never shop at Sears again.
Though it’s hard to tell whether Sears’ image in Canada has been tarnished forever, “it does make it harder to continue in business,” if Canadians decide to intentionally avoid the retailer, Atkinson noted.
“They need every dollar of business they can get.”
READ MORE: What Sears Canada’s case says about how safe your retirement benefits are
Decision to let go Mike Myers’ brother particularly puzzling
The company’s decision to lay off Peter Myers, who starred in a popular Sears commercial along with his comedian brother Mike Myers, seems like an especially big blooper, said Robert Levy, president of Toronto-based BrandSpark International.
“What were they thinking?”
Myers, who worked at the Sears head office in Toronto for nearly 36 years, recruited his star brother in 2014 to shoot an ad aimed at dispelling rumours that the troubled retailer was about to shut down.
“I met so many people in so many communities where Sears is hugely important,” Myers told Global News. The commercial, he said, was about doing something to help.
Store managers from across the country would call him on a weekly basis after the ad went live to tell him how much it meant to be able to tell customers ‘have confidence, buy from Sears,’ Myers recalled.
The online commercial has over 1.5 million views and still features on Sears Canada’s YouTube page.
But when the company told employees was filing for creditor protection, Myers soon found he was among the 2,900 whose job had been axed.
“It was beyond surreal,” he told Global News.
According to Levy, it was also a mistake from a public relations point of view.
“From a communication point of view, that one hurts.”
It makes it harder to view Sears as an underdog.
“We can all get behind the underdog,” Levy continued, but the company has so far failed to tell Canadians how cutting thousands of positions could save the 15,000 employees who still have jobs, he noted.
The company’s Facebook and Twitter accounts have been silent about the recent developments in bankruptcy court.
A recent Facebook post advertising Sears Canada’s kids’ collection attracted nine comments about the retailer’s recent layoff.
So far, the company hasn’t responded.
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