Sears Closing Downtown Stores

[jon]

Sears Canada to shut three major stores
Thomson Reuters
* Will return stores to developer for C$170 mln
* Follows similar moves by U.S. parent Sears Holdings (Adds market reaction, analyst comment)

TORONTO, March 2 (Reuters) - Sears Canada Inc said on Friday it will shut three major downtown stores in Vancouver, Calgary and Ottawa, in a move that will allow it to raise capital to revamp stores in other locations.

The department store chain, majority-owned by U.S.-based Sears Holdings Corp, plans to close outlets at the Vancouver Pacific Centre, the Calgary Chinook Centre and the Ottawa Rideau Centre by Oct. 31. The Calgary store has been operating for nearly 50 years.

It will return the locations to developer Cadillac Fairview Corp Ltd for C$170 million ($172 million). The transaction is expected to close on or around April 20.

"They had a leadership change in Canada and, you know, part of the change is that they're just being very, very careful with cash now," said Morningstar analyst Paul Swinand, who noted that Sears Holdings is also watching its cash.

Sears Canada's chief executive, Calvin McDonald, joined the company in June 2011.

"While we had no plans to close stores, the transaction for these three specific locations provides an attractive financial benefit," McDonald said in a statement.

Sears Holdings, which owns 94.7 percent of Sears Canada according to Thomson Reuters data, said late last month it would raise about $770 million by spinning off parts of its business and selling prime real estate.

That announcement helped reassure Wall Street that the retailer had enough assets to tap to pay down debt, sending its shares up nearly 19 percent.

Both companies have struggled with falling sales. In early February, Sears Canada cut regular prices on more than 5,000 products, part of a "transformation" to help it compete more effectively.

Shares of Sears Canada rose 5.2 percent to C$12.83 on Friday morning on the Toronto Stock Exchange.

($1=$0.99 Canadian) (Reporting by Allison Martell and Euan Rocha; Editing by Gerald E. McCormick and Janet Guttsman)

[Mike Cleaver]

The Vancouver Pacific Centre location may not be vacant very long.
Seattle based Nordstrom's is moving into Vancouver for it's first Canadian location and has been looking for a suitable property downtown.
It was originally rumoured that Nordstrom's would be taking over HMV's space at Robson and Burrard but that is a much smaller space than Nordstrom's normally would require.
As for Sears, I can't remember the last time I ever went into or bought anything there.

[Dan Sys]

No real surprise, the Sears store in downtown Vancouver was never really a good fit. The question is who will take over that prime piece of property? Even though Nordstom's already has plans for a store at Burrard & Robson I can see them possibly grabbing this opportunity. Or how about a mega sized Wal-Mart?

[Dan Sys]

Great minds think alike Mike.....and post at the same time.....

[freqfreak2]

Great minds think alike Mike.....and post at the same time.....

Ya gotta watch that one boys.

The corollary is: fools seldom differ

[jon]

When I first moved to Edmonton In January 1975, I had only ever lived in or near two cities, Ottawa and Greater Vancouver. As a result, I thought it extremely odd that Sears did not have a store in Downtown Edmonton. Remember, this was at a time when "everyone" had a downtown store, even local legends like WW Arcade, Western chains like London Drugs and SaveCo, and U.S. discount stores like Kresges. All of which are long gone from Downtown Edmonton, by the way.

Obviously, from what I read now, Vancouver, Calgary and Ottawa were the exceptions, in terms of having Sears stores downtown.