TORONTO — Sears Canada’s exit from the market in the critical fourth quarter selling period threatens to cast a pall over the coming holiday retail season as the company prepares for a mass liquidation of goods beginning this Thursday.
Sears Canada will begin selling off products in a broad range of categories at its 130 stores across the country, offering bargain prices on merchandise such as clothing and footwear, small and large appliances, home accessories and luggage just before the busiest time of the year, a move that stands to sap business from rival retailers such as Walmart Stores Inc., Canadian Tire Corp Ltd. An Ontario judge approved the retailer’s request to liquidate last week in the wake of failing to reach a deal with its former executive chairman Brandon Stranzl to buy the business and keep some stores open. The shopping tradition, which began in 1952, marks a period after which retailers are typically “in the black,” turning a profit for the year.
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Sears said it will issue a full refund to any customers who have bought Sears Protection Agreements within the past 30 days.
Customers whose warranties have yet to expire will be considered as creditors in the company’s court process through the retailer’s court-appointed bankruptcy monitor, FTI Consulting.
On Monday, the retailer confirmed Stranzl’s resignation. But the liquidation will be just enough to ruin the margins of everybody else for the (pre-holiday) period.” The fourth quarter includes Black Friday, the holiday that offers deep merchandise sales one day after U. The liquidation is going to spoil the party for those retailers who are hoping to do what the fourth quarter is intended for, where after a year of hard work, the ink turns from red to black and they can generate margin and pay the shareholders “I’m not sure there is any good time (for a liquidation sale), but it would be better in February than in the last quarter of the year, because for many retailers the most important quarter of the year is the fourth quarter,” said Diane Brisebois, president of the Retail Council of Canada.
“The liquidation is going to spoil the party for those retailers who are hoping to do what the fourth quarter is intended for, where after a year of hard work, the ink turns from red to black and they can generate margin and pay the shareholders,” said Jim Danahy, CEO of Toronto-based retail advisory firm Customer Lab, who said many small retailers inside malls where Sears is an anchor tenant also stand to take a hit. “A liquidation of this size — we’re not talking 0 million here, we are talking a sizable amount of merchandise.
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Danny De Vito in the movie Other People's Money depicts the stereotype most people have about liquidators.But you shouldn’t choose the first one you find on the Internet.Evaluate each of them carefully before making a decision.Rarely does anyone begin a business planning to one day sell off all their valuable assets and close the doors forever.And yet it happens all the time, with very little information available to assist proprietors in the actual sale.“This isn’t good news for anybody operating in categories that Sears sells.” Nevertheless, Danahy expects that Sears inventory levels are far lower now than they would be if the retailer were in good financial health, given that Sears filed for protection from its creditors in June as it attempted to restructure the business and find a buyer. In the short term, it will have an impact.” Brisebois said she expects most large retailers have already put plans in place anticipating a Sears liquidation.