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Oct 10 (Reuters) - Sears Canada moved a step nearer to permanent closure after several attempts to find a buyer failed, with the retailer saying it will seek court approval on Friday to shutter its remaining 130 stores, leaving 12,000 employees without jobs.
The retail chain is the latest victim of a widespread shift in consumer behavior demanding more convenience and up-to-date fashions that has seen nimble online operators such as Amazon.com Inc. claw market share from bricks-and-mortar retailers that have clung to their traditional business models.
It also adds to the list of retail bankruptcies this year.
Sears Canada, which began operations in Canada in 1952, expects liquidation sales to begin on about Oct. 19, and continue for 10 to 14 weeks, the Toronto-based company said in a statement on Tuesday.
Weighed down by over C$1.1 billion ($879 million) in liabilities, almost matching its assets, and falling sales every quarter since it was spun off from Sears Holdings in 2012, Sears Canada filed for creditor protection in June. It laid out a restructuring plan that included cutting 2,900 jobs and closing roughly a quarter of its stores.
It last week won court approval to close 11 stores and sell some businesses, and to extend creditor protection to Nov. 7.
The only takeover bid that offered some hope of keeping Sears Canada afloat failed, with creditors arguing liquidation would yield a better payout than to keep the company solvent.
That bid, from Executive Chairman Brandon Stranzl, who stepped away from day-to-day operations to come up with a proposal, presented “significant closing risk and uncertain recovery,” according to court-appointed monitor FTI Consulting.
A revision to the bid on Oct. 3 failed to convince the creditors otherwise. Led by Wells Fargo Capital Finance Corp and GACP Finance Co they pushed Sears Canada to enter into liquidation agreements for the rest of its assets by Oct. 7.
The company received no viable transaction to keep it in business, the company’s statement on Tuesday said.
“Sears Canada, with the recommendation of its advisors and approval of the (court-appointed) monitor, FTI Consulting Inc, is seeking an order to commence a liquidation that would result in a wind-down of its business following Court approval,” the Toronto-based company said.
$1 = 1.2515 Canadian dollars Reporting by Nichola Saminather in Toronto, Ahmed Farhatha in Bengaluru; editing by Susan Thomas and Grant McCool
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