Sears Canada Inc, said it would sell 50% of it’s stake in eight Canadian properties. Sears a struggling retail store, has suffered a steep decline in same-store sales and has lost a lot of its market share through tough competition from U.S retail giants Walmart and Target. Therefore, in order to stay open and continue, Sears has decided to sell them to Montez Income Properties Corp, a company which invests in real estate.
This sale will liquidate a lot of the assets that Sears currently owns and will help cash flow problems. However, the cost of this will be over 1,100 jobs lost at the stores that will be closes down. This may cause company image and reputation problems as well as large redundancy costs. Sears is likely to further lose market share and control. The joint-venture assets however was stated to remain the same as “selling to Montez impact neither our store operations nor our ability to serve customers.”
