Yahoo Finance Sears Canada closing two Toronto stores
Sears Canada Inc is cashing out of two popular Toronto stores by selling leases back to their landlords for $191-million in a move that reflects the increasingly cut throat competition in the country's retail industry.
The retailer has also agreed to sell an option relating to a third store for $1 million that could raise $53 million within five years, Sears announced on Friday.
"We were presented with an opportunity that gives us a significant financial benefit without changing our plans to improve the business and make Sears more relevant to Canadians," Calvin McDonald, the company's president chief executive, in a statement.
Canada's retail landscape has been heating up, most recently with the entrance of U.S. discount retailer Target Corp. There is limited large-scale commercial real estate space in Canada so some landlords have bought back leases to replace tenants with potentially better-performing stores.
Last year, Sears sold its leases to three stores in Vancouver, Calgary and Ottawa for $170-million to landlord Cadillac Fairview Corp., which then brought upscale, Seattle-based Nordstrom.
On Friday, Sears has agreed to sell the leases of its stores at Yorkdale Shopping Centre and Square One Shopping Centre, both co-owned by Oxford Properties Group and Alberta Investment Management Corp. (AIMCO). The deals are expected to close in late June, and Sears is expected to leave those two sites by Mar. 31, 2014.
The third option relates to a store at Scarborough Town Centre.
In the latest round of results, Sears posted a $31.2 million loss. Earlier this year, it announced it was cutting 700 jobs across the country. The company said jobs would not be impacted by Friday's announcement, and it plans to relocate employees across the Greater Toronto Area.
