Sears Canada hired the same leading bankruptcy advisory firm on June 12 that had represented Target Canada in its insolvency proceedings. Ten days later, it filed for bankruptcy protection to restructure its capital and its operations, shutter dozens of it 225 stores and lay off nearly 3,000 employees, but planned to continue operating. Today it said that the restructuring efforts failed, and that it would seek court approval to liquidate, shutting all its remaining stores and laying off its remaining 12,000 employees.
Retailers are notoriously difficult to restructure. Once they’re this deep in trouble, after years of losses, they own few assets and are burdened with debts, as everything has been sold or pledged to creditors. Their suppliers, who’ve been burned too many times, are getting skittish. Lenders are getting desperate. And acquirers can be impossible to find. Most retailer bankruptcies start out as restructurings but end as liquidations.-- More...
