In October, Sears, one of the most established department store and retailer announced that it would be selling back leases of its few biggest locations, and this includes their flagship store in Toronto’s Eaton Centre. With this sell back, sears would be generating $400 million from the landlord, Cadillac Fairview.

Cadillac Fairview wants replace Sears and to get a better performing retailer in order to get more sales and get more rent. This sell back deal, especially in Eaton Centre, allowed many big retailers to bid on this prime location, one of which is Nordstrom.

“Sears Canada took in $4.3-billion in revenue in fiscal 2013, down from $6.3-billion five years earlier.”

The decline of Sears started in 2007 when the company decided to invest less and less into its stores, but rather focusing on their cash flow. Capital investment at Sears declined 37% from 2007 to 2009. This move caused Sears to lose their customers, and their sales continued to decline.

Although sellback of their prime locations can be seen as a risky move, but it instantly generates an extra $400 million in Canada. The sellback of these underperforming stores will lower Sears’ fixed costs, and hopefully retain their profit. Now with extra cash, Sears should focus on improving their stores and merchandises which improves their customer relationship to recapture lost customers, and grow more customers.