Sears' days may be numbered as the company recently announced that it's future is in doubt. It's retail model has certainly seemed outdated for at least the past decade.
5 years ago, I walked into the Brentwood location to look for an exercise bike. After browsing through the multiple exercise bikes on display, I settled on the model and type that suited me. When I got a hold of a staff member to let them know that I would like to purchase that particular exercise bike, he brought me to the register where I made the purchase. The staff member asked me for my telephone number, handed me the receipt and told me that they will call me when the bike arrives within 2 weeks and that I can pick it up at their warehouse downstairs. This was done without previously informing me that they don't stock such items in the store. I was stunned that a store with such a massive footprint just took more than $350 dollars of my hard-earned money only to tell me that I must come back 2 weeks later to pick up my purchase. Stunned, I didn't complain. I just walked past the, "60% Off" shirts that were now priced down to $50 dollars (can buy the same shirts at full price for $15-25 elsewhere) and exited the store. Sears has gotten so comfortable with its retail model that it has lost touch with the reality of consumers living in an economy where wages have fallen far behind the cost of consumer goods, food and housing. The minimum wage in BC is currently $10.85/hour. The minimum wage in 1991 was $6.00/hour when you could buy a 700 square foot 1 bedroom condo for $60, 0000. I digress.
Enough of my experience with a dinosaur of a retailer that has existed long past its extinction date.
Now that Sears is likely to leave a massive void at the east end of Brentwood Mall within the next 1 or 2 years, Shape Properties is now tasked with the job of deciding the future of the 3-level big-box space. The current plan for the southeast end of the site at Beta and Lougheed is to build a grocery store beneath a residential tower just across the parking lot from the lowest Sears level. Perhaps the vacated Sears space is best suited for a grocery store in at least the lowest of the 3 vacated levels. The other 2 levels could be used for 2 or more smaller retailers. Perhaps a fitness gym/martial arts facility could go into part of the space.
Future of Sears Canada in doubt
Hundreds of employees at Metro Vancouver Sears Canada stores and thousands more across the country are on edge today following the latest bit of bad news.
The company has announced a 15 percent drop in sales in the first quarter, posting a net quarterly loss of $144.4 million.
On the upside, same-store sales rose by 2.9 percent in the first quarter.
Sears Canada has 95 full-line department stores, 26 home stores, and 14 outlet stores, according to its 2016 annual report. It also has 69 Hometown stores and 62 Sears Travel offices.
Its five Lower Mainland department stores are at Capilano Mall, Brentwood, Metropolis at Metrotown, Coquitlam Centre, and Willowbrook Shopping Centre.
It closed its Richmond Centre store more than two years ago.
Sears Canada has postponed its 2017 annual shareholders meeting, which was scheduled for Wednesday (June 14), as it tries to address its "liquidity situation".
"Based on management's current assessment, cash and forecasted cash flows from operations are not expected to be sufficient to meet obligations coming due over the next 12 months," Sears Canada stated in a news release.
It had expected to be able to borrow $175 million (before transaction fees), which would be secured by its owned and leased real estate.
However, negotiations with its lenders have resulted in only $109 million being available.
"That, and the lack of available alternative sources of liquidity (through real estate monetizations, asset sales or otherwise), which may not be available in a timely manner, mean there are material uncertainties as to the Company's ability to continue to satisfy its obligations and implement its business plan in the ordinary course," the company stated. "Accordingly, such conditions raise significant doubt as to the Company's ability to continue as a going concern."
