Report: Sears Canada gets court approval for liquidation
After 65 years in business, Sears Canada is officially closing its doors.
The long-struggling department store chain won court approval to begin liquidating all its remaining assets starting Oct. 19. The move will affect 12,000 employees, according to Reuters.
According to the report, the approval was granted by the Ontario Superior Court of Justice, which also extended creditor protection for Sears Canada to Jan. 22, 2018. The public liquidation sales are set to end on Jan. 21, 2018.
In June, Sears Canada filed for protection from its creditors and announced it would be restructuring under Canada’s Companies’ Creditors Arrangement Act. At that time, the company got court approval of a sale and investment solicitation process (SISP) to seek out proposals for the acquisition of, or investment in, the Sears Canada Group’s business, assets and/or leases, and to implement one or a combination of proposals.
Sears Canada received and implemented going concern transactions for various lines of business. Despite exhaustive efforts, no viable transaction for the retailer to continue as a going concern was received.
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Discount giant commits to another relief initiative
Walmart is reaching out to those impacted by the wildfires in California.
Walmart and the Walmart Foundation have committed up to $250,000 in support of ongoing relief efforts to affected communities in California. This includes funding for non-profit grants supporting the American Red Cross and Salvation Army’s shelter and feeding efforts, as well as in-kind product donations to support first responders.
Walmart operates more than 300 retail facilities in California, which are supported by over 90,000 associates. Walmart also supports local businesses, and spent $24.5 billion with California suppliers in fiscal year 2016. This supported 212,055 California supplier jobs, according to the retailer.
“As with the devastating fires in Clearlake last year, Walmart is committed to supporting communities in California in times of need,” said Angela Wilson, Walmart regional general manager. “By providing product, support and donations to both first-responders and local nonprofits, we will be able to provide help in the short-term and the recovery period after the fires, and we’re proud of our associates who are volunteering their time to help our community get back on its feet.”
These funds are in addition to $40 million that the discount giant has already donated to support relief efforts for those in the United States and Puerto Rico affected by the devastating 2017 hurricane season.
Analysis: September sales bode well for holiday
Overall, September was a good month for retail sales with a substantial rise in spending supported by both higher gas prices and an increase in the number of people buying vehicles. Outside of these two segments, especially in pure retail and foodservice, spending also ticked up albeit to a more moderate degree.
Although the devastating hurricanes boosted the numbers, mostly thanks to stimulating demand to replace damaged cars and by initially pushing up gas prices, the figures nonetheless demonstrate the robustness of the American consumer. Indeed, the fear for September was that as gas prices rose, spending on other things would fall back. In the end, this did not materialize, and consumers used modest gains in wages – supported by the robust labor market – to carry on buying even as they incurred additional expense.
The comfortable position of the consumer is underscored by our weekly sentiment tracker. This showed a little more caution about future household finances creeping in during September but also revealed very few significant changes in purchasing habits across the month. In our view, the American consumer has quite a bit of firepower, even if some of this is being funded by credit. Excluding energy, more subdued inflation also helped to buoy the consumer mood.
On a sector level, home improvement retailers performed well with a 7.7% uplift in sales over the prior year. There is some benefit here from the rebuilding effort after the various disasters, but we believe that the bulk of the hurricane-related uplift has yet to come through. As such, a surge of household projects related to winter preparation played as much of a role in lifting the DIY sector as did other factors.
At the other end of the spectrum, electricals stores remain the laggards of retail with a 5.3% year-over-year decline in sales this month. Some of this is down to the shift to sales via other channels and retailers, but some is also due to a relative lack of interest in products. It remains to be seen whether the release of new devices, like Apple’s iPhones, will help lift this sector as we move into the holiday season. We remain skeptical that it will do so to any significant degree.
Using the September numbers as a guide to holiday performance is challenging, not least because of the various exceptional factors which have impacted the month. However, stripping these out suggests that the consumer is in a good and stable position which bodes well for the critical upcoming trading period. That said, it is clear that while the consumer is still willing and able to spend, they are doing so conservatively and are carefully weighing up the necessity and the value of purchases.
In this type of environment, retailers have to work hard to stimulate demand. In our opinion, this means that while there are gains to be had over the holidays, those gains will be hard won and will be insufficient to benefit all retailers.