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Sears Canada (1952-2017)

  • Thread starter CanadianNational
  • Start date
Admiral Beez said:
Jeez, their only brands of value left are Kenmore and at a much lower extent DieHard.
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What are you talking about? In terms of assets, they recently hit the intellectual property gold mine in Canada. "WTS? What the Sears?" is pure gold. Worth billions.
 
Not to overdose on bad Sears news, but here is a fascinating insider look at the downfall of Sears Holdings in the States. Particularly interesting is the description of the conflicts-of-interest which mean that Eddie Lampert will likely profit even if Sears tanks. Given that Lampert is the majority shareholder in Sears Canada, a lot of it is probably true of the Canadian operations as well.

Inside Sears' death spiral: How an iconic American brand has been driven to the edge of bankruptcy
Hayler Peterson, Business Insider, 8 January 2017
 
Quote from the article:

Both tenant and landlord
Shareholders have filed suit against ESL for another way they say Lampert benefits from both sides of Sears' dealings.

It starts with a real-estate investment trust called Seritage Growth Properties, which Lampert created in 2015. Even though ESL and Seritage are separate entities, Lampert and his hedge fund own a little more than 43% of Seritage. They also own a little more than 54% of Sears Holdings.

After creating Seritage, Lampert orchestrated a big real-estate deal. Sears sold 235 stores to Seritage in 2015. Sears raised $2.7 billion from the sale and rented back the store space from Seritage.

In many of these locations, Seritage has the right to take over all or half of the square footage and then rent the empty space to other retailers at sometimes four times the rent.

"Seritage is transforming retail rents from $4 per square foot to $20-plus," Sears director Bruce Berkowitz said in November on a conference call for his investment fund, which also owns a stake in the REIT. "Seritage clearly proves the point about the value of the real estate remaining at Sears."

It has already happened in six stores and seven Sears auto centers, according to Securities and Exchange Commission filings. Seritage has converted half the square footage in nine other stores.
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Surprise, surprise.

AoD
 
Tuscani01 said:
WTS?!?

The NB government is probably the only one who has faith in Sears right now... I hope the money is contingent on Sears actually lasting.

Sears partners with NB to open new business centre, improve customer service

The New Brunswick government is giving struggling retailer Sears Canada Inc. $3.5 million to open a business centre in the province that’s expected to create 180 new jobs.

http://globalnews.ca/news/3189212/s...new-business-centre-improve-customer-service/
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Reminds me of Malcolm Bricklin's NB scheme, https://en.wikipedia.org/wiki/Bricklin_SV-1
 
AlvinofDiaspar said:
With government funding at almost $20K a position, you got to wonder if NB might just be better of giving that amount out directly.

AoD
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Your point is well taken - it's a very generous subsidy. I suspect the NB gov't wants to use this deal to help sell Edmunston as a call centre/back office location to other companies - can't say whether or not this was a wise investment in that regard. But Sears is clearly desperate for cash.
 
Skeezix said:
Your point is well taken - it's a very generous subsidy. I suspect the NB gov't wants to use this deal to help sell Edmunston as a call centre/back office location to other companies - can't say whether or not this was a wise investment in that regard. But Sears is clearly desperate for cash.
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It might even be justifiable if the business is sound and have a positive long-term outlook. Sears does not belong to that category, and I am not sure if NB is wise throwing money after that given its own fiscal challenges. And don't forget that call-centres are not high-paying jobs either - so what's Sears' contribution?

AoD
 
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Perspective - 180 full-time positions at $15/hour inclusive, 35 hours/week for 50 weeks cost 4.7M. Of course you'd have supervisors, IT, etc- but even then, you do the math. :rolleyes:

AoD
 
Key words: "expected to create 180 jobs".

Based on my previous experience living in the Maritimes, this typically means there will actually be fewer jobs than that to start, but that 180 is the ultimate goal. With most of these types of arrangements, it plays out as follows:

* Company rolls into town with the promise of a "monorail" (see "The Simpsons").
* Locals froth with lofty expectations of good jobs and better economic conditions.
* Company grabs a bunch of subsidies and tax incentives while paying the lowest wages/benefits they can.
* Company closes up shop and lays everyone off, falling far short of their initial hiring goals and other expectations.

For precedent, see Convergys, see Research in Motion, see TeleTech, see Alteka, see...

Call centres tend to be horrible places to work, with low pay, overwhelming pressure to perform, and are likely similar to developing world sweat shops in their ability to exploit desperate people in economically deprived areas who need to feed their babies. Thankfully, I never had to work in one, but I know plenty of people who did.

Also, minimum wage in NB these days is around $10.65 .

IMO, Sears is a bloated corpse that no one will admit is dead and fish out of the river.
 
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