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Sears Holdings explores options for sale of stake in Canadian arm

RBR Staff Writer Published 15 May 2014

Department store chain Sears Holdings is exploring strategic alternatives for its 51% interest in multi-channel retailer Sears Canada, including a potential sale of Sears Holdings' interest or Sears Canada as a whole.


Following this, Sears Holdings, which operates more than 2,300 stores in the US and Canada, is looking to appoint an investment banking firm.

Separately, beleaguered retailer Sears Canada said it acknowledges Sears Holdings' announcement to explore strategic alternatives including the potential divestiture of its remaining shares in Sears Canada and/or the sale of Sears Canada as a whole.

The move comes as Sears Holdings, which operates Sears and Kmart discount stores, is seeking to return into profitability. Since 2005, sales have been declined, when Lampert merged the two US chains in an $11bn deal.

Since 2010, the company closed about 300 US stores to generate cash. However, the retailer is struggling to regain profitability.

In mid-January 2014, Sears Canada has inked an outsourcing agreement with third party vendor IBM that will see the company cutting a total of about 1,628 call center and warehouse jobs.

As part of retailer's efforts to cut expenses, it has struck a deal with IBM to outsource the work currently being done by three internal Sears Customer Contact Centers or call centers.

This was expected to affect about 1,345 jobs while it is implemented over the next nine months in a seamless manner to customers, the company said.

Formed in 1952 as a joint venture of Simpson's and Sears, Sears Canada operates in all provinces and territories of Canada.

Image: Sears in Fairview Mall. Photo: Courtesy of Raysonho @ Open Grid Scheduler / Grid Engine.